M&M, Star Health, Happiest Minds, Navin Fluorine, Hitachi Energy, V-Guard, Quess Corp & More Q1 Review

Mahindra and Mahindra's Q1 FY26 standalone Ebitda margin at 14.3% was broadly in line with the brokerage's estimate of 14.2% but below the Bloomberg consensus estimate of 14.5%. Star Health and Allied Insurance reported 12% net earned premium growth and 18% decline in PAT, in line with estimates.

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HDFC Securities Institutional Equities

Mahindra & Mahindra - Core business set for another strong growth year

Mahindra and Mahindra Ltd.'s Q1 FY26 standalone Ebitda margin at 14.3% was broadly in line with our estimate of 14.2% but below the Bloomberg consensus estimate of 14.5%. The auto division's Ebit margin at 8.9% contracted 34 bps QoQ as the company ramped up contract manufacturing for the ePV subsidiary Mahindra Electric Automobile (MEAL).

Ex-of the ePV contract manufacturing segment, the core PV margin stood at 10%. The farm division's Ebit margin at 19.8% continued to impress, ahead of our estimate of 18.7%. It maintained its FY26 guidance for the SUV segment, to grow in the mid to high teens range.

Going forward, we expect an increase in ePV contract manufacturing and recording of PLI benefits in subsidiaries, which would continue impacting the standalone auto business margins in the near to medium term.

However, this should improve financials of the EV subsidiaries. In the midst of a rare earth supply overhang, management clarified that it has sufficient inventory for the next two quarters as it has also evaluated light earth and ferrite solutions.

We value the company on a SOTP basis, with the core business being valued at 19x Jun-27 EPS for a target price of Rs 3,520 and maintain Add rating.

Navin Fluorine International - Ref gas boosts Q1 performance

We retain a Buy on Navin Fluorine International Ltd., with a target price of Rs 5,551 on the back of -

1. earnings visibility, given long-term contracts;

2. robust pipeline in the CDMO business; and

3. ramp-up in recently commissioned plants.

Ebitda was in line with estimates while APAT was higher than estimates, owing to lower-than-expected interest cost.

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