M&M share price jumps over 7% to record high as analysts remain bullish, raise target price after strong Q4 results

M&M share price rallied over 7% in early trade on Friday after analysts remained bullish and raised target price on the stock after the company’s strong Q4 results. M&M shares jumped as much as 7.66% to a record high of ₹2,554.75 apiece on the BSE.

Mahindra & Mahindra Ltd (M&M) reported a net profit growth of 31.6% year-on-year (YoY) at ₹2,038.21 crore in the fourth quarter of FY24. The company’s net profit in the year-ago quarter was ₹1,548.97 crore.

The automobile major’s revenue from operations in Q4FY24 rose 11.24% to ₹25,108.97 crore from ₹22,571.37 crore, YoY. During the quarter, M&M’s automobile segment volumes rose 14% YoY to 2,15,280 units, while tractor sales declined 20% YoY to 71,039 units.

Read here: M&M Q4 results: Net profit rises 32% to ₹2,038 crore, revenue up 11% YoY; declares dividend of ₹21.10

Brokerages have maintained their bullish view on M&M shares after its Q4 results and raised target prices on the stocks. Here’s what analysts have to say on M&M Q4 results and M&M shares:

Nuvama Institutional Equities

Revenue visibility in the auto segment is robust, supported by a large UV order book at 220,000 units and healthy launch pipeline in FY25 – with Thar five-door and dedicated platform EVs. Furthermore, recovery in the farm segment is likely on abundant monsoons, favourable government policies and benign terms of trade for farmers, said Nuvama Institutional Equities.

Factoring in higher volume/margins, the brokerage firm raised its FY25E and FT26E earnings per share (EPS) estimates by 8% and 13%. Following the revision, it expects revenue and core earnings CAGR at 14% and 17% over FY24–26E.

The broking firm retained its ‘Buy’ rating and raised M&M share price target to ₹2,760 per share from ₹2,380 earlier.

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M&M’s overall performance in Q4FY24 beat Motilal Oswal’s estimates on all fronts. It has raised EPS estimates by 6% and 11% for FY25 and FY26, and expects M&M to post a CAGR of ~17%, 20% and 16% in revenue, EBITDA and PAT over FY24-26.

While M&M has outperformed its own targets on earnings growth and achieved RoE of 18% in FY24, it maintains long-term guidance of 18% RoE as it has now sharply raised its capex guidance to ₹370 billion for FY25-27 from ₹195 billion during FY22-24. The implied core P/E for M&M stands at 24x and 19x FY25E and FY26E EPS, which is still attractive versus peers, Motilal Oswal noted.

The brokerage maintained its ‘Buy’ rating on M&M shares and raised the target price to ₹2,720 apiece.

Emkay Global Financial Services

M&M posted healthy Q4 results, with 11% YoY revenue growth accompanied by stable margins QoQ at 12.9%. The margin beat was driven by a strong tractor EBIT margin. Demand outlook across both key businesses is healthy – strong double-digit growth in SUVs on new launches, and potential uptick in tractors, Emkay Global said.

The brokerage upgraded FY25E and FY26E EPS estimates by ~8% each, on stronger growth expectations in SUVs, possible turn in the tractor cycle, and operating leverage-led stability in margins. It now builds-in ~9% core EPS CAGR over FY24-26E.

Emkay Global retained its ‘Add’ call and raised M&M stock price target to ₹2,550 apiece from ₹2,100 earlier.

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Kotak Institutional Equities

M&M’s automotive division’s demand trends remain healthy, while we expect tractor volumes demand to recover from 2QFY25E. The company continues to execute well by maintaining a leadership position in all three segments, improved return ratio along with cash flow generation and being well-prepared for EV transition, Kotak Equities said.

The brokerage increased FY2025-FY26E EPS estimates by 12-14%, on higher volumes and EBITDA margin. It retained ‘Add’ rating and raised M&M share price target to ₹2,550 apiece from ₹1,800 earlier, owing to higher volume and margin assumptions for the standalone business, higher valuation for listed and non-listed subsidiaries and roll-forward to June 2026E. It values the standalone business at 20X June 2026E core EPS.

At 9:20 am, M&M shares were trading 6.56% higher at ₹2,528.55 apiece on the BSE.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.