Buy Mahindra and Mahindra; target of Rs 3800: ICICI Securities
Executive Brief • Key Highlights
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- ✓ICICI Securities issued a buy rating for Mahindra and Mahindra with a target price of Rs 3800.
- ✓The firm noted that while margins fell slightly below expectations due to inflation, strong auto demand remains a positive factor.
- ✓Management expects these cost pressures to ease significantly as the company moves toward FY28.
Story at a Glance
- Category
- Indian Markets
- Reported By
- MoneyControl
- Reading Speed
- 1 Minute(s)
- Market Focus
- India Economy
ICICI Securities's research report on Mahindra and Mahindra Mahindra & Mahindra (M&M)'s reported EBITDAM of 11.7% was below our estimate. EBITM for both auto and farm undershot our expectation by 20-30bps. In the near term, the impact of RM inflation may continue to weigh on overall margins; however, management expects headwinds to ease during FY28. Demand trends in underlying auto industry continue to remain robust, while tractors are likely to see muted traction owing to rainfall deficit and drought condition in key regions. In the auto segment, Outlook We envisage M&M's healthy performance to continue, supported by strong traction for its models, capacity addition in the near term and new launches.
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