'Buy' M&M Shares, Says Yes Securities Post Q1 Results On Attractive Valuations

M&M Q1 FY26 operating performance in-line to brokerage's/street estimates while beat at adjusted profit after tax by 17%/11%, led by lower depreciation. Standalone revenues grew 26.1% YoY at Rs 340.8 billion as volumes grew 14.5% YoY/+11.8% QoQ to 381.3k units and blended ASP grew 10.1% YoY (-2.8% QoQ) at ~Rs 893.8k/unit (est Rs 891.6k/unit).

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Yes Securities Report

We have largely maintained FY26/27 EPS as we expect Mahindra and Mahindra Ltd.'s auto business to continue lead the growth in the near-term while continuing farm equipment segment momentum would drive revenue/Ebitda/PAT CAGR to 10-11% over FY25-27E.

Implied core P/E for M&M stands at 25.8x/24.4x FY26/FY27E EPS is yet attractive.

With recent outperformance and growth levers largely played out, we see limited upside while retaining Buy with SOTP based target price at Rs 3,726 (vs Rs 3,516) on Mar'27 EPS.

Key near term margins risks are product mix impact of pack 1 and 2 BEVs (from Q2 FY26). M&M stays as one of our top OEM pick along with Hyundai Motors, TVS Motor and Eicher Motors.

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