M&M Share Price up by 7% Post Q4 Results, Analysts Elevate Targets

Stock price of Mahindra & Mahindra rallied by over 7% in early trade on Friday reaching a record high of ₹2,554.75 per share on the BSE. This surge followed the company’s Q4 results for FY24 and bullish analyst reviews which included raised target prices.

Q4 Performance Highlights

Net Profit Growth: M&M reported a 31.6% YoY increase in net profit reaching ₹2,038.21 crore compared to ₹1,548.97 crore in the same quarter last year.

Revenue Increase: Revenue from operations rose by 11.24% YoY to ₹25,108.97 crore from ₹22,571.37 crore.

Automobile Segment: Volumes in M&M’s automobile segment increased by 14% YoY, totaling 215,280 units.

Tractor Sales: There was a 20% YoY decline in tractor sales with 71,039 units sold.

Analyst Perspectives

Nuvama Institutional Equities

Revenue and Launch Pipeline: The firm emphasized the robust revenue visibility in the auto segment supported by a large UV order book of 220,000 units and a strong launch pipeline for FY25 including the Thar five door and dedicated platform EVs.

Farm Segment Recovery: Recovery in the farm segment is expected due to favorable monsoon forecasts, supportive government policies and positive trade terms for farmers.

Earnings Forecast: Nuvama raised its FY25E and FY26E EPS estimates by 8% and 13%, respectively forecasting a revenue and core earnings CAGR of 14% and 17% over FY24–26E.

Target Price: The firm retained its buy rating and increased the target price to ₹2,760 per share from ₹2,380.

Motilal Oswal Financial Services

Q4 Performance: M&M’s Q4 performance exceeded Motilal Oswal’s estimates across all metrics.

Earnings Growth: EPS estimates were increased by 6% for FY25 and 11% for FY26. The firm projects a CAGR of approximately 17%, 20% and 16% in revenue, EBITDA and PAT over FY24-26.

RoE and Capex: M&M achieved an RoE of 18% in FY24 and aims to maintain this in the long term with a capex increase to ₹370 billion for FY25-27.

Valuation: Core P/E for M&M stands at 24x and 19x FY25E and FY26E EPS considered attractive compared to peers.

Target Price: Motilal Oswal maintained its buy rating and raised the target price to ₹2,720

Emkay Global Financial Services

Revenue Growth and Margins: M&M posted an 11% YoY revenue growth with stable QoQ margins at 12.9%. The margin beat was driven by strong tractor EBIT margins.

Demand Outlook: Strong double digit growth in SUVs due to new launches and a potential uptick in tractors are expected.

Earnings Estimate: Emkay upgraded FY25E and FY26E EPS estimates by 8% each predicting a 9% core EPS CAGR over FY24-26E.

Target Price: The firm retained its add call and raised the target price to ₹2,550 from ₹2,100.

Kotak Institutional Equities:

Automotive Demand: Healthy demand trends in the automotive division with an expected recovery in tractor volumes from 2QFY25E.

Execution and Position: M&M’s execution has been strong, maintaining leadership in key segments, improving return ratios and being well prepared for the EV transition.

Earnings Estimate: Kotak increased FY2025-FY26E EPS estimates by 12-14% based on higher volumes and EBITDA margins.

Target Price: The firm retained its add rating and raised the target price to ₹2,550 from ₹1,800, considering higher volume and margin assumptions and a roll forward to June 2026E.

Final Words

M&M's impressive Q4 results and the optimistic outlook from multiple brokerage firms have driven its share price to new heights reinforcing its strong market position and future growth potential.