Nomura raises M&M stock target prices, sees upside potential of 13.5%

Global brokerage firm Nomura has increased the target price for Mahindra & Mahindra (M&M) shares to Rs 3,374 from an earlier Rs 2,929 as the company has set bold targets across the group to scale up over FY25-30.

Nomura, in its report, stated that they expect M&M to continue delivering market-beating growth across segments, and it remains the top pick in the sector. Further upside potential is evident from exports and scale-up of group companies.

“We raise target EV/EBITDA to 16x (from 14x), at a slight premium to peers to factor in the strong growth and EV success (implies ~29x FY26F P/E). Current valuation at ~13.3x FY26F EV/EBITDA (adjusted for subsidiaries) vs peers at 15-21x, is attractive given our 19% EPS CAGR over FY24-26F,” said Kapil Singh, Research Analyst at Nomura.


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The Battery Electric Vehicles (BEVs) that we saw at the investor meet have very attractive designs complemented by very impressive tech features. We believe these will be slotted one segment above the current range of MM’s ICE vehicles, he added.

For the company's Farm Equipment Sector (FES), the company estimates domestic tractor population will reach 11 mn units. The farm machinery sector in India forms only 20% of the tractor market vs 170% globally and M&M is taking strong efforts to ramp up the same.

Management has reiterated that for Tech Mahindra, FY27 topline growth target is greater than its peers. Mahindra & Mahindra Financial Services too aims to achieve 2.5% ROA and 18% ROE in the medium term.

Shares of M&M have given multibagger returns of 111.6% in the last one year and were trading 1.5% up on BSE at Rs 2,969.50 around 12:30 pm on Tuesday.

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