CLSA has maintained an outperform rating on Mahindra & Mahindra (M&M) with a target price of ₹3,510 per share, implying an upside potential of approximately 10% from its current market price (CMP) of ₹3,193.
Despite a quarter-on-quarter decline in average selling price (ASP) for its auto and farm segments, M&M achieved an all-time high auto EBIT margin of 9.7%, showcasing strong operational efficiency. CLSA believes that new launches like the XUV 3X0, Thar Roxx, and upcoming EVs will drive market share gains in the utility vehicle (UV) segment.
However, the brokerage also cautioned that rising EV scale may make it difficult for M&M to sustain current margin levels. On the tractor business, management remains confident about industry-wide tractor volume growth exceeding 15% in Q4, which should support overall revenue growth.
With CLSA’s target of ₹3,510, M&M is positioned for steady expansion in the UV and farm segments, although margin pressures from the EV business remain a key watch factor.
(Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Investors are advised to do their own due diligence before making any investment decisions.)