Mahindra & Mahindra Receives Bullish Ratings from Nuvama and Nomura Post Strong Q2 Results

Mahindra & Mahindra (M&M) has captured investor attention after releasing its financial results for the September quarter. Following this performance, prominent financial research firms Nuvama and Nomura have both maintained their 'Buy' recommendations for M&M stock.

Nuvama's report suggests M&M is poised for sustained growth, projecting a 15% annual growth rate (CAGR) for its auto segment revenue between FY25 and FY28, fueled by demand for existing models and a pipeline of new launches. The farm equipment segment is also expected to grow at a 13% CAGR. Nuvama anticipates M&M's overall revenue and core earnings to grow around 15% and 19% respectively, with a strong return on investment exceeding 60%. Key growth catalysts include upcoming launches such as the XEV 9s (seven-seater E-SUV) and new ICE and electric models. The firm forecasts M&M's BEV volumes to reach 48,000 units in FY26 and 77,000 in FY27, contributing significantly to domestic UV market share and helping M&M meet upcoming CAFÉ 3 norms.

Nomura echoes this optimism, identifying M&M as a top Original Equipment Manufacturer (OEM) pick. It forecasts M&M's SUV segment growth to outpace the industry, projecting growth rates of 18%, 11%, and 7% for FY26-FY28. Nomura credits this outlook to premiumization strategies and a strong model cycle. The brokerage highlights M&M's aggressive strategy in both electric (BEV) and internal combustion engine (ICE) models, along with potential hybrid offerings, as key to maintaining its competitive edge. The Production Linked Incentive (PLI) approval for BEVs is seen as a strategic advantage. Nomura expects M&M's EV EBITDA margins to enter double digits and views the current valuation as attractive.

Impact: This news is likely to create positive investor sentiment and potentially drive M&M's stock price higher, reflecting confidence in its growth strategy and product development, especially in the electric vehicle sector. Rating: 8/10

Difficult Terms: * **Q2**: Refers to the second quarter of a company's financial year, typically the period from July to September. * **Brokerages**: Financial advisory firms that provide research and recommendations on stocks to investors. * **Bullish Stance**: An optimistic outlook indicating that the price of a stock or market is expected to increase. * **CAGR (Compound Annual Growth Rate)**: The mean annual growth rate of an investment over a specified period longer than one year. * **OEM (Original Equipment Manufacturer)**: A company that manufactures parts or components that are used in another company's end product. * **ICE (Internal Combustion Engine)**: A type of engine that generates power by burning fuel within a combustion chamber, commonly used in traditional vehicles. * **BEV (Battery Electric Vehicle)**: A vehicle that is powered exclusively by electricity stored in rechargeable batteries, with no internal combustion engine. * **CAFÉ 3 norms**: Corporate Average Fuel Economy standards, which are government regulations aimed at improving fuel efficiency and reducing vehicle emissions. * **EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)**: A measure of a company's operating performance, used to assess profitability. * **PLI (Production Linked Incentive)**: A scheme by the Indian government to encourage domestic manufacturing and production by providing incentives based on incremental sales of manufactured goods. * **EV/EBITDA**: A valuation metric that compares a company's total enterprise value to its earnings before interest, taxes, depreciation, and amortization, used to assess if a company is over or undervalued. * **P/E (Price-to-Earnings ratio)**: A valuation ratio that compares a company's stock price to its earnings per share, indicating how much investors are willing to pay for each dollar of earnings.