Mahindra & Mahindra Ltd.'s growth outlook is increasingly dependent on its automotive business as the farm equipment segment faces a weaker demand environment. Brokerages expect SUV launches, electric vehicles and a recovery in light commercial vehicles to support growth, but see tractor volumes remaining under pressure over the next few quarters.
Citi, Jefferies, Kotak and Goldman Sachs retained Buy ratings on the stock. Citi raised its target price to Rs 4,330 from Rs 4,260, while Kotak increased its target to Rs 4,125 from Rs 4,000. Goldman Sachs also raised its target, while Jefferies retained its Rs 4,000 target. The brokerages have, however, cut their tractor growth expectations amid weak monsoons.
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Mahindra & Mahindra Ltd.'s consolidated profit rose 25% year on year in Q2FY27, supported by growth in its automotive business, particularly SUVs. Consolidated revenue increased 25% to Rs 57,553 crore. On a standalone basis, net profit rose 12.9% to Rs 5,102 crore, beating analyst estimates, while revenue increased 27.1% to Rs 42,477 crore. Higher commodity costs weighed on operating profitability.
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M&M Q2 highlights (Standalone, YoY)
- Net profit up 12.9% to Rs 5,102 crore versus Rs 4,521 crore. (Bloomberg estimate: Rs 4,545 crore.)
- Revenue up 27.1% to Rs 42,477 crore versus Rs 33,422 crore. (Estimate: Rs 41,332 crore.)
- Ebitda up 2.1% to Rs 4,912 crore versus Rs 4,810 crore. (Estimate: Rs 5,015 crore.)
- Ebitda margin at 11.6% versus 14.4%. (Estimate: 12%.)
Here's what brokerages are saying after M&M announced Q2 results
Citi
- Maintained 'Buy'; target price raised to Rs 4,330 from Rs 4,260.
- Expects SUV volumes to grow in the mid-to-high teens, aided by electric vehicles and new launches.
- Cut FY27 tractor growth guidance to flat from 5% amid weak monsoons.
- Raised FY27–FY29 earnings estimates by 1–3%, despite farm demand and cost pressures.
Jefferies
- Maintained 'Buy'; target price at Rs 4,000.
- New SUV and EV launches in the first half of CY27 support an expected 12% automotive volume CAGR through FY29.
- Expects tractor volumes to decline 3% in FY27 and 6% in FY28.
- Cut FY27–FY29 EPS estimates by 3–4%, but expects 17% core EPS CAGR over FY27–FY29.
Kotak
- Maintained 'Buy'; target price raised to Rs 4,125 from Rs 4,000.
- NU-IQ SUV launches from the first half of CY27 are expected to drive market-share recovery.
- Tractor volumes are likely to decline over four quarters amid weak monsoons.
- Raised FY27–FY29 Ebitda estimates by 3%, supported by SUV demand and a recovery in light commercial vehicles.
Goldman Sachs
- Maintained 'Buy'; target price raised to Rs 3,850 from Rs 3,700.
- Expects SUV growth in the mid-to-high teens during the second half of FY27.
- Cut FY27 tractor volume guidance to flat from 5% growth.
- Lower commodity costs and pricing support margins; raised FY27–FY29 EPS estimates by 3–4%.
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