M&M Share Price: Mahindra and Mahindra share price jumped over 5 per cent in early deals on Monday boosted by the company’s healthy March quarter earnings.
Mahindra & Mahindra posted a net profit of Rs 1,549 crore for the quarter ended March, up from Rs 1,268 crore in the base quarter. The net profit was up 22.1 per cent and up 67 per cent YoY including exceptional items. Analysts’ expectations on the YoY increase had varied between 39-69 per cent.
Revenue for the quarter came at Rs 22,571,4 crore, up 31 per cent from Rs 17,237 crore in the same quarter of the previous fiscal. Revenue growth was above analyst estimates of 28-29 per cent growth.
At the board meeting to approve the quarterly results of the company, M&M also announced a dividend of Rs 16.25 per share.
The stock ended with a mild gain of 0.34 per cent at Rs 1,281.85 after the March quarter results on May 26.
Mahindra and Mahindra stock has significantly outperformed the benchmark Sensex and BSE Auto index in the last one year. The stock is up 38 per cent in the last one year against a 28 per cent gain in the BSE Auto index and a 15 per cent gain in the benchmark Sensex.
Mahindra and Mahindra shares hit their 52-week high of Rs 1,396 on BSE on February 16, 2023, but witnessed some profit booking thereafter. As of May 26, the stock is 8.5 per cent down from its one-year peak level.
Here is what brokerages have to say about stock and the company’s post-March quarter earnings:
Brokerage firm Motilal Oswal Financial Services maintained a buy call on the stock with a target price of Rs 1,500, citing Mahindra & Mahindra’s MM’s Q4FY23 operating performance was in line, though PAT exceeded expectations thanks to higher other income and lower tax.
“While the outlook for tractors remains stable, we expect the auto business to be the key growth driver for the next couple of years. Despite the deterioration in the mix, we estimate revenue, EBITDA, and PAT CAGRs of nearly 14 per cent, 19 per cent, and 16 per cent, respectively, over FY23-25E. The implied core PE (price-to-earnings ratio) for Mahindra & Mahindra stands at 14.2 times and 12.5 times FY24E and FY25E EPS respectively” said Motilal Oswal.
“While the valuation is still cheap compared to peers, it has seen a substantial rerating in FY23 as the stock is now trading in line with its five-year average core PE (against discount of 30 per cent earlier) driven by a strong performance in the SUV segment, market share gain in tractors and new launch pipeline in EVs (electric vehicles),” said the brokerage firm.
Macquarie maintains an ‘Outperform’ rating on the stock with a price target of Rs 1,536. Q4 saw a marginal beat for core earnings led by better margins and a solid PV order book and resilient tractor demand drive our constructive outlook, the brokerage said. Management expects to further gain market share helped by a new lightweight tractor launch.
Nuvama maintained a‘BUY’ with an increased target price of Rs 1,470 from earlier Rs 1,430. Considering the hefty order book and increase in production capacity, we are raising FY24E and FY25E EPS by 8 per cent each. Following the revision, we expect revenue/core earnings CAGR of 12 per cent/14 per cent over FY23–25E; this would lift post-tax RoIC to 30 per cent-plus.
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