As many as three analysts who have coverage on Mahindra and Mahindra Ltd. have reiterated their positive stance on the passenger vehicle and tractor manufacturer.
The positive stance comes after the stock has seen a sharp correction from its 52-week high over the last two weeks. Shares fell 9% last week after a 6% drop on Friday, amidst concerns surrounding Tesla’s potential entry into the Indian markets and its impact on the company.
Bernstein has an “outperform” rating on the stock with a price target of ₹3,650 per share, implying a potential upside of 37% from the previous closing price.
The brokerage said the stock’s latest correction makes it an appealing investment. It said the company’s management is adhering to its capital allocation policy and Tesla’s potential India entry may not have a large impact in the medium-term. If any, it is already priced in.
Bernstein said that although Tesla’s imported electric vehicles, permissible under EV policy, would target a higher price segment than M&M’s offerings, reducing near-term impact, the long-term impact will remain. The extent of it still depends on how serious Tesla is on India, it added.
Jefferies also has a “buy” rating on M&M with a price target of ₹4,075 per share, implying a potential upside of 53% from Friday’s close.
The brokerage also sees a limited impact on M&M in the near-term due to Tesla’s entry, given the gap in portfolio prices and EV policy offering lower duty only on limited volumes for high-priced vehicles.
Jefferies finds M&M’s 30,000 EV orders encouraging as it forms 30% of India’s total EV sales in the 2024 calendar year. The brokerage finds M&M’s core price-to-earnings ratio of 20 times for financial year 2026 “attractive” for an 18% estimated Earnings Per Share (EPS) CAGR for financial year 2025-2027.
The third one to reiterate its positive stance on M&M was Goldman Sachs, with a “buy” rating and a price target of ₹3,800, which implies a potential upside of 43% for the stock.
It said Tesla’s potential India entry is driving a 15% discount in M&M’s auto business compared to its peers.
Based on the brokerage’s estimates for financial year 2026 and 2027 the current stock price is implying a 15% and 19% discount, respectively, to the price-to-earnings multiple of the company’s automotive segment compared to its closest peer Maruti Suzuki. It added that the implied automotive business price-to-earnings multiple is currently trading at an 8% discount to the tractor business.
Over the last 10 years, M&M has returned a median of 23% and 26% over a 12- and 24-month period, respectively, following episodes of 15% stock price corrections from peak in five instances, Goldman Sachs said.
Out of the 40 analysts that have coverage on M&M, 37 have a ‘buy’ call, two have a ‘hold’ call and one has a ‘sell’ call.
M&M shares ended Friday’s trade session 6.2% lower at ₹2,663.5 apiece. It has been in the red for 10 out of the last 11 trade sessions.
M&M shares opened Monday’s trade session little changed, and fell 1.4% soon after. However, around 9.25 am, the stock started its recovery and gained over 1.6%% to hit an intraday high of ₹2,712.45 apiece.
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