Jefferies has reiterated its Buy rating on Mahindra & Mahindra (M&M) with a target price of ₹4,075, despite the recent 14% drop in M&M’s stock price over the last 10 days.
The stock’s decline has been attributed to concerns over Tesla’s potential entry into India and uncertainty surrounding M&M’s electric vehicle (EV) orders. However, Jefferies downplays the impact of Tesla’s entry, noting:
- Tesla’s higher price points and the government’s policy of offering lower duties only on limited volumes make it unlikely to pose a near-term threat to M&M.
- M&M’s 30,000 EV orders are encouraging, forming 30% of India’s total EV sales in CY24, reflecting strong domestic demand.
Jefferies finds M&M’s core valuation of 20x FY26E PE attractive, given its projected 18% EPS CAGR over FY25-27. The brokerage maintains a positive outlook on M&M, citing its resilient growth strategy and strong order book.
