Auto giant Mahindra & Mahindra (M&M) may have seen its stock slip up to 2% in intraday trade following its Q1FY26 results, but top brokerages remain firmly bullish.
The company reported its earnings after market hours on July 30, and as of the latest, M&M shares were trading at Rs 3,222.60, down 0.41%. Despite the dip, analysts believe the long-term growth of the company remains strong, supported by margin stability, product pipeline, and a rural recovery.
Let’s take a look at why Motilal Oswal and Nuvama continue to back the stock –
Motilal Oswal on Mahindra & Mahindra
Motilal Oswal has maintained a ‘Buy’ rating on Mahindra & Mahindra with a target price of Rs 3,687 per share. According to the brokerage report, M&M’s Q1 PAT came in at Rs 34.4 billion, beating their estimate of Rs 30.7 billion, largely due to higher other income.
While the Farm Equipment Segment saw a margin improvement of 140 basis points YoY to 19.8%, the auto segment held steady at 8.9%, though it was slightly affected by contract manufacturing margins in electric SUVs.
“While M&M has outperformed its own targets of earnings growth and RoE of 18%, management remains committed to delivering 15–20% EPS growth and 18% RoE. This ensures sustained profitability and shareholder value,” Motilal Oswal said in its note.
The brokerage sees M&M as well-positioned to outperform across core businesses, citing a healthy rural recovery and new product launches in UVs and tractors. It forecasts a CAGR of approx. 15% in revenue, 14% in EBITDA, and 18% in PAT over FY25–27.
Nuvama on Mahindra & Mahindra
Nuvama Institutional Equities also retained its ‘Buy’ call with a slightly higher target price of Rs 3,700. According to the brokerage report, Q1FY26 revenue and EBITDA grew 26% and 21% YoY, in line with estimates. However, the firm trimmed FY26E/27E EPS by 2% due to a lower margin outlook for the auto segment.
“We estimate revenue and core earnings CAGRs would be 13% each over FY25–28E; this shall sustain RoIC at 55%-plus,” the brokerage said.
Nuvama expects the auto segment to grow at 14% CAGR, led by demand for key models and new launches. Meanwhile, the farm segment is projected to clock 10% CAGR, as per the brokerage report.
“Increasing BEV penetration should help reduce fleet emissions, which should enable the company to meet the upcoming CAFE3 norms,” added the brokerage in its report.
Nuvama expects BEV volumes of 48,000 units in FY26 and 96,000 units in FY27, making up 8% and 15% of domestic UV sales, respectively. The company plans to launch five new BEVs by 2030 and a focus on global markets like Europe, South Africa, and Latin America.
BNP Paribas on M&M
BNP Paribas has an Outperform rating on Mahindra & Mahindra with a target of Rs 3,665 per share. According to them, M&M “solid execution in UVs and tractors on both product and profitability fronts makes it a unique, high-quality, solid earnings growth story in a market that is starved for growth.”
With more product interventions planned, they expect this growth outperformance to be sustained. With core auto valuations similar to Maruti’s last 10-year average, “while offering much stronger earnings CAGR, we find its valuation attractive.”