Shares of Mahindra & Mahindra (M&M) are likely to remain in focus after Morgan Stanley maintained an ‘Overweight’ rating on the stock, with a target price of Rs 3,675 per share.
Morgan Stanley noted that M&M could spend Rs 11.4 billion to acquire a majority stake in SML Isuzu. The acquisition values SML Isuzu at approximately 16–18 times FY25 estimated earnings, compared to commercial vehicle peers like Ashok Leyland trading at 20 times FY24 earnings.
Through this acquisition, M&M aims to double its market share in the sub-3.5-tonne commercial vehicle segment from the current 3% to 6%. The brokerage highlighted that it likes M&M’s strategic shift towards the light commercial vehicle (LCV) business.
At the current market price of Rs 2,865.00 per share, Morgan Stanley’s target price of Rs 3,675 implies a potential upside of about 28%.
Disclaimer: This article is for informational purposes only. Investors are advised to consult certified financial advisors before making any investment decisions.
