Anand Rathi, a brokerage firm, initiated coverage on Mahindra & Mahindra (M&M) with a target price of ₹3600, even as the stock experienced a slight decline.
New Delhi: Anand Rathi Securities has expressed confidence in Mahindra & Mahindra (M&M), initiating coverage on the company's stock. On Friday, the company's shares saw a minor dip of 0.33%, although the stock also touched an intraday high of ₹3,149. Anand Rathi believes that M&M stock possesses significant future growth potential, setting a target price of ₹3,600.
Anand Rathi Expresses Confidence in Mahindra & Mahindra, Predicts Growth
Anand Rathi has begun covering Mahindra & Mahindra (M&M) and holds a positive outlook for the company's future. They project a compound annual growth rate (CAGR) of approximately 9% in total sales from FY25 to FY27. This growth is primarily attributed to a 12% increase in passenger vehicle sales, a 6% increase in tractor and commercial vehicle sales, and a 15% increase in exports. Furthermore, an 8% increase in revenue per unit is anticipated, mainly driven by increased Electric Vehicle (EV) sales. EV sales are expected to contribute 8% and 12% to total sales in FY26 and FY27 respectively.
Anand Rathi anticipates robust growth for Mahindra & Mahindra's business from FY25 to FY27. Their analysis suggests a 18% annual revenue growth and a 17% increase in EBIT (Earnings Before Interest and Taxes). A 19% increase in Profit After Tax (PAT) and a 21% increase in core earnings are also projected. Based on these positive indicators, Anand Rathi has assigned a 'Buy' rating to M&M with a target price of ₹3,600. This target is based on 26 times the FY27 earnings per share.
Mahindra & Mahindra's Future Indicates Significant Transformation
Mahindra & Mahindra has set an ambitious target of expanding its product line by 2030, including seven fuel-powered SUVs, five electric vehicles (EVs), and five small commercial vehicles. Notably, the company plans to launch several new models in 2026, including a new 7-seater fuel-powered SUV, two updated versions of existing fuel-powered SUVs, two new electric cars, one fuel-based commercial vehicle, and one electric commercial vehicle. This strategy reflects the company's focus on innovation and features to maintain competitiveness in a rapidly evolving market.
While Anand Rathi acknowledges potential challenges such as slower-than-expected sales in the Indian market, increasing competition, fluctuations in raw material prices, and foreign exchange rate volatility, they still view Mahindra's prospects favorably. However, they prioritize Escorts and Maruti Suzuki as primary investment choices, with Mahindra as a secondary preference.
