Mahindra & Mahindra Stock Leaps Higher! Brokerage Boosts Target to ₹3,950 – Don't Miss This Bullish Call!

Research firm Prabhudas Lilladher has maintained its "ACCUMULATE" rating for Mahindra and Mahindra (M&M), significantly raising the target price to Rs 3,950 from Rs 3,845. This optimistic outlook follows M&M's Q2FY26 financial results, which showed a 21.3% year-on-year (YoY) increase in standalone revenue, narrowly missing consensus estimates by 1.4%. Despite this, adjusted profit after tax (adj PAT) surged by 17.7% YoY, outperforming expectations due to reduced other expenses and higher non-operating income, even after accounting for losses in joint ventures and subsidiaries.

The report highlights that M&M continues to demonstrate robust performance across its business segments, evidenced by steady margin expansion and market share gains. Prabhudas Lilladher has slightly revised its volume and realization forecasts, now expecting overall volume to grow at a 9.1% CAGR and blended realization at a 5.0% CAGR from FY25 to FY28. Consequently, the brokerage forecasts a 15.2% CAGR for revenue, 13.5% for EBITDA, and 12.7% for EPS over the same period.

The target price of Rs 3,950 values the core business at 26 times its projected September 2027 earnings, with the value of subsidiaries added based on their respective market prices. Currently, M&M trades at a P/E ratio of 26.4x and 23.9x based on FY27E and FY28E consensus earnings.

Impact This positive research report, coupled with strong earnings and an increased target price, is likely to enhance investor confidence in Mahindra and Mahindra. It could spur increased buying activity, potentially leading to a rise in the stock's market value in the near to medium term. Rating: 8/10

Difficult Terms: * **YoY**: Year-on-Year, comparing metrics over the same period in consecutive years. * **BBGe**: Bloomberg Businessweek Estimate, a consensus forecast compiled by Bloomberg. * **PLe**: Previous Estimates, referring to forecasts made earlier. * **adj PAT**: Adjusted Profit After Tax, profit after taxes with specific adjustments. * **JV**: Joint Venture, a business arrangement between two or more parties. * **Subsidiaries**: Companies controlled by a parent company. * **CAGR**: Compound Annual Growth Rate, the average annual growth rate over a specified period. * **EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of operating performance. * **EPS**: Earnings Per Share, a company's profit allocated to each outstanding share. * **TP**: Target Price, the price level at which a broker expects a stock to trade. * **P/E**: Price-to-Earnings ratio, a valuation metric comparing stock price to earnings per share. * **FY27E/FY28E**: Estimated Financial Year 2027 and 2028. 'E' denotes 'Estimates'. * **Consensus Earnings**: The average earnings per share forecast by analysts covering the stock.