I-Sec downgrades Mahindra & Mahindra to Add, raises target price to Rs 3,200

ICICI Securities has downgraded Mahindra & Mahindra to Add with a revised target price of Rs 3,200 (Rs 3,100 earlier0. The current market price of Mahindra & Mahindra is Rs 2,922. M&M, incorporated in 1945, is a Large Cap company with a market cap of Rs 363819.23 crore, operating in the Auto sector.

Mahindra & Mahindra's key products/revenue segments include Automobile-Light, Medium & Heavy Commercial, Jeep, Passenger Car, Sale of services, Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 41881.38 crore, up 8.55% from last quarter Total Income of Rs 38582.96 crore and up 16.95% from last year same quarter Total Income of Rs 35809.91 crore. The company has reported net profit after tax of Rs 3317.22 crore in the latest quarter.

The company's top management includes Mr.Anand G Mahindra, Mr.Ranjan Pant, Ms.Padmasree Warrior, Mr.Haigreve Khaitan, Ms.Shikha Sharma, Mr.T N Manoharan, Mr.Muthiah Murugappan, Ms.Nisaba Godrej, Mr.Vikram Singh Mehta, Mr.Rajesh Jejurikar, Dr.Anish Shah, Mr.Sat Pal Bhanoo. Company has B S R & Co. LLP as its auditors. As on 31-03-2025, the company has a total of 124 crore shares outstanding.

Investment Rationale

Mahindra and Mahindra (M&M) entered into an agreement to acquire 58.96% stake in SML Isuzu Ltd (SML), a manufacturer of light and medium commercial vehicles. SML has a leading position in ILCV bus segment with ~16% market share and is in advance stage of launching its first EV bus. Prima facie, ICICI Securities sees this deal as strategic positive for M&M as it may help it address gaps in its product portfolio with potential to unlock value through synergies in cost, network, manufacturing, platform and supply sourcing via. better economies of scale. The deal is valued at ~8x TTM PE which appears to be in favour of M&M, in their view. Overall, the brokerage expects M&M to continue its strong performance led by its robust UV portfolio, market share gains in both SUV and tractors. I-Sec has downgraded M&M to ADD from Buy with SoTP-based target price of Rs 3,200 (earlier Rs 3,100).

Promoter/FII Holdings
Promoters held 18.45 per cent stake in the company as of 31-Mar-2025, while FIIs owned 38.3 per cent, DIIs 29.65 per cent.