Mahindra & Mahindra (Photo: IANS)
M&M share price: Mahindra and Mahindra share price rose more than 5 percent in early deals on Monday
M&M Share Price: Share price of Mahindra and Mahindra rose more than 5 percent in early deals on Monday, boosted by the company’s healthy quarterly results in March.
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. Net profit rose 22.1 percent and 67 percent year over year, including special items. Analysts’ expectations for the year-over-year increase ranged between 39 and 69 percent.
Revenue for the quarter was Rs 22,571.4 crore, an increase of 31 percent from Rs 17,237 crore in the same quarter of the previous financial year. Sales growth exceeded analyst estimates of 28-29 percent growth.
During the board meeting to approve the company’s quarterly results, M&M also announced a dividend of Rs 16.25 per share.
The stock ended with a slight gain of 0.34 percent at Rs 1,281.85 following its March quarterly results on May 26.
The shares of Mahindra and Mahindra have significantly outperformed the benchmark Sensex and BSE Auto index over the past year. The stock is up 38 percent over the past year, versus a 28 percent gain in the BSE Auto index and a 15 percent gain in the benchmark Sensex.
Mahindra and Mahindra shares reached their 52-week high of Rs 1,396 on BSE on 16 February 2023, but made some gains after that. On May 26, the share is 8.5 percent lower than the highest level in a year.
Here’s what brokers have to say about stocks and the company’s quarterly earnings after March:
Brokerage firm Motilal Oswal Financial Services maintained a buy request for the share with a target price of Rs 1,500, citing the operational performance of Mahindra & Mahindra’s MM in Q4FY23, though PAT beat expectations thanks to higher other income and lower taxes.
“While the outlook for tractors remains stable, we expect the automotive industry to be the main driver of growth in the coming years. Despite the mix deterioration, we estimate revenue, EBITDA and PAT CAGRs of nearly 14 percent, 19 percent and 16 percent, respectively, in FY23-25E. The implied core PE (Price Earnings Ratio) for Mahindra & Mahindra is 14.2 times and 12.5 times FY24E and FY25E EPS respectively,” said Motilal Oswal.
“While valuation is still cheap relative to peers, it has seen a substantial revaluation in FY23 as the stock now trades in line with its five-year average core P/E (down from a 30 percent discount previously), driven by strong performance in the SUV segment, market share gains in tractors and new launch pipeline in EVs (electric vehicles),” the brokerage firm said.
Macquarie maintains an ‘Outperform’ rating for the stock with a price target of Rs 1,536. In the fourth quarter, we saw marginal improvement in core revenues, led by better margins and a solid PV order book and resilient tractor demand boosting our constructive outlook, the brokerage said. Management expects to gain further market share, aided by the launch of a new lightweight tractor.
Nuvama maintained a ‘BUY’ with an increased target price of Rs 1,470 from earlier Rs 1,430. Given the sizeable order book and the increase in production capacity, we are increasing EPS for FY24E and FY25E each by 8 percent. After the review, we expect a revenue/core revenue CAGR of 12 percent/14 percent over FY23-25E; this would increase the after-tax RoIC to 30 percent plus.
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