M&M Stocks Gaining Momentum: Uncovering Three Forces Behind the Boost
Catch the Excitement Small talk about the skyrocketing stock prices of Mahindra & Mahindra (M&M), reaching an intra-day high of Rs 3,159.70, leaving investors thrilled and the industry buzzing!
Mahindra & Mahindra's Stock Surge: A Closer Look
It's no secret that Nomura, a renowned brokerage house, views M&M as the top automobile pick, thanks to its impressive Q4FY25 results and industry-leading growth. M&M's shares soared due to a 22% increase in net profit, combined with a dividend of Rs 25.30 per equity share. The stock hit the bullseye, being the top gainer in the Nifty 50, and nearly touching its all-time high of Rs 3,270.95.
"Woohoo! M&M's here to stay!" proclaims Nomura, anticipating the company to continue leading the industry with its powerful new launch plans and capacity expansion. They expect an outstanding 14% growth in SUVs over FY25-27, and electric vehicles to be a primary catalyst behind these outstanding results.
Noseround at Nuvama, another brokerage house, also applauded M&M's enhanced margins in both the auto and tractor segments. Over FY25-27, they foresee the auto segment's revenue growth rate to be an impressive 16% on the back of strong demand for models like Thar, XUV 3XO, and XEV.9e, alongside a pipeline of upcoming models. In the farm sector, a 10% CAGR revenue growth is anticipated, powered by share gains, advantageous policies, and robust exports. Nuvama remains optimistic on M&M, maintaining the Buy call on the stock with a target price of Rs 3,700.
The Finance Scene - The Bigger Picture
The domestic brokerage house, Motilal Oswal, acknowledges that M&M is poised to outpace its peers across core businesses, propelled by a healthy recovery in rural areas and innovative new product launches in both utility vehicles (UVs) and tractors. They project a CAGR of 13% in revenue, 13% in EBITDA, and 18% in net profit for FY25-27. Despite outperforming its own targets of earnings growth and RoE in each of FY24 and FY25, M&M stays determined to deliver a 15-20% EPS growth and an RoE of 18%, ensuring continued profitability and enhanced shareholder returns.
Jefferies, an international brokerage, has reaffirmed its Buy call on M&M, although it trimmed the stock price to Rs 4,000 from Rs 4,075. M&M's Q4 underscores its 12th consecutive quarter of double-digit EBITDA growth, with analysts predicting a 12% volume CAGR and 18% core earnings per share CAGR over FY25-28. They believe the company offers further re-rating potential due to its optimistic growth outlook and improving franchise.
Bank of America, too, remains bullish on M&M, adhering to its Buy rating and raising the target price to Rs 3,700 from Rs 3,385. The brokerage house sees excellent prospects in M&M's electric vehicles and views a promising start for EVs, suggesting further valuation upside. With M&M's dominating performance in SUVs, strong tractor upcycle, robust EV readiness, and reasonable valuations, the stock pinpoints enormous potential for investors.
Q4FY25 Results - The Heart of the Matter
In the closing chapters of FY25, M&M demonstrated a 22% increase in its standalone net profit, reaching Rs 2,437 crore, in comparison to Rs 2,000 crore in the same quarter a year prior. Furthermore, its revenue expanded by a stunning 24% to Rs 31,609 crore, compared to Rs 25,434 crore in Q4FY24.
The Bottom Line:
M&M's dazzling share prices have caught the attention of the nation, all thanks to an exhilarating blend of breakthrough EV launches, solid financial performance, and the promise of industry-beating growth over the upcoming years. So, buckle up, folks, because the M&M train is headed for an exciting ride!
Mahindra & Mahindra, share prices, Motilal Oswal, Nomura, Nuvama, auto industry, brokerage houses, stock market, automobiles, Electric Vehicles, M&M's outlook, business news
- Investors are enthusiastic as Mahindra & Mahindra's (M&M) shares have soared, propelled by a 22% increase in net profit and a dividend of Rs 25.30 per equity share.
- The stock market phenomenon is evident with M&M being the top gainer in the Nifty 50, nearly touching its all-time high of Rs 3,270.95.
- Nomura, a renowned brokerage house, views M&M as the top automobile pick, anticipating the company to continue leading the industry with its powerful new launch plans and capacity expansion.
- Noseround at Nuvama, another brokerage house, is optimistic about M&M's enhanced margins in both the auto and tractor segments, forecasting an impressive 16% revenue growth in the auto segment and a 10% CAGR revenue growth in the farm sector over FY25-27.
- Motilal Oswal acknowledges M&M's potential to outpace its peers across core businesses, driven by a healthy recovery in rural areas and innovative new product launches in both utility vehicles (UVs) and tractors.
- Jefferies, an international brokerage, predicts a 12% volume CAGR and 18% core earnings per share CAGR over FY25-28 for M&M, indicating further re-rating potential due to its optimistic growth outlook and improving franchise.
- Bank of America remains bullish on M&M, adhering to its Buy rating and raising the target price to Rs 3,700 from Rs 3,385, attributing excellent prospects in M&M's electric vehicles and a promising start for EVs, suggesting further valuation upside.
- In the closing chapters of FY25, M&M demonstrated a 22% increase in its standalone net profit and a revenue expansion of 24%.
- The finance scene is filled with news about Mahindra & Mahindra's stellar Q4FY25 results, electrifying EV launches, and promising growth outlook, making headlines in business, technology, and general-news sectors.
