Domestic brokerage Motilal Oswal has reiterated its 'Buy' rating on Mahindra and Mahindra Ltd. after the company announced its January-March (Q4 FY26) results. The brokerage has set a target price of Rs 3,963, based on March-28E SoTP.
Motilal Oswal has raised its earnings per share estimates by 4%/3% over FY27E/FY28E. The brokerage also estimates M&M to post a compound annual growth rate of ~15%/12%/13% in revenue/Ebitda/PAT over FY26-28.
M&M Q4 FY26 Results
M&M's Q4 standalone revenue grew 26% YoY to Rs 39,500 crore(in line), driven primarily by a strong 24% volume growth and a blended ASP growth of 1.6%.
Overall, Ebitda margins came in marginally lower than estimates at 14.1% (est of 14.8%). Ebitda grew 19% YoY to Rs 5,560 crore (in line).
Auto revenues grew 25% YoY to Rs 31,100 crore (vs est of Rs 30,100 crore), while PBIT margins came in at 9.5% (in line).
Farm revenues grew 32% YoY to Rs 8,480 crore (vs estimate of Rs 8,820 crore), while PBIT margins came in at 19.4% (in line, flat YoY)
Other income grew 10 times YoY to Rs 590 crore (vs est of Rs 63.1 crore).
On the back of higher-than-expected other income, PAT grew 53% YoY to Rs 3,730 crore, 15% ahead of our estimates.
FY26 performance: Revenue/Ebitda/PAT grew 25%/23%/33% to Rs 1,45,000 crore/Rs 2,090 crore/Rs 15,700 crore, respectively. Operating cash flow/free cash flow grew from Rs 16,600 crore/12,000 crore in FY25 to R 22,800 crore/16,600 crore
Valuation and view
On the back of its healthy launch pipeline and positive consumer sentiment, management has provided a strong outlook for FY27E across segments: tractor industry at mid-single digit, M&M UV at mid-to-high teens, and the LCV industry at high single digit.
Motilal Oswal reiterates Buy with a target price of Rs 3,963 (based on Mar'28E SoTP).
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