M&M shares gain 3% after analysts remain 'bullish' but highlight near-term risks

Shares of Mahindra & Mahindra

Ltd. gained about 3% on Wednesday, May 6, following brokerage reactions to its March quarter results, which were largely in-line with Street expectations.

HSBC has maintained a ‘buy’ rating with a price target of ₹4,200. The brokerage expects M&M’s SUV business to grow in the mid- to high-teens, while the tractor industry is likely to see mid-single-digit growth in FY27.

 



Management has also expanded its launch pipeline, adding six ICE SUVs, three battery electric vehicles and seven light commercial vehicle models. However, HSBC flagged commodity costs and monsoon uncertainty as near-term risks.

Nomura reiterated a ‘buy’ rating with a target of ₹4,580, citing that Q4 performance was ahead on certain parameters.

It said that a strong SUV launch cycle across ICE and EV segments should support demand and market share gains, even as near-term margin risks persist.

The brokerage expects SUV volumes to grow 14% each in FY27 and FY28, led by capacity ramp-up, while trimming tractor growth estimates due to monsoon-related risks.

Jefferies also retained a ‘buy’ rating, though it cut its price target to ₹4,000. It said that M&M reported its 16th consecutive quarter of double-digit EBITDA growth, with Q4 EBITDA rising 19% YoY.

While the tractor segment faces the risk of a slowdown, the auto business continues to see healthy volumes and improving EV margins.

The brokerage has lowered FY27-28 earnings estimates by 3-5%, and now expects an 11% core EPS CAGR over FY26-28, followed by a stronger growth recovery.

CLSA has an ‘outperform’ rating with a target of ₹4,279. It said M&M’s leadership in the utility vehicle segment with a 25.3% market share, supported by a diversified portfolio.

CLSA expects a 17% EBITDA CAGR over FY26-28, driven by a strong launch pipeline and improving profitability, although it remains cautious on the tractor segment due to potential El Niño risks and near-term margin pressures from raw material costs.