M&M shares surged over 5% to their intraday high of ₹3,457 on Friday, making it one of the Sensex's top three gainers during the trading session, following the announcement of exceptional Q1 FY27 results. The stock had already gained 4% in the previous trading session after the earnings update on Thursday. M&M shares have delivered more than 361% returns over the last five years and over 132% gains in the last three years, according to NSE data. However, on a year-to-date basis, the stock has lost nearly 9% in 2026, though it has gained 11.6% in the last one-month period. The company's market capitalisation stood at over ₹4.27 lakh crore as of the trading session on Friday, July 31.
Mahindra & Mahindra (M&M) delivered exceptional Q1 FY27 results with consolidated profit attributable to owners rising 34% YoY to ₹5,455 crore, significantly outperforming earlier expectations despite facing 400-500 basis points of commodity-cost inflation across its automotive and farm businesses. The company generated nearly 70% of its incremental profit from core operating businesses, demonstrating the growing strength of its diversified portfolio and the emergence of electric vehicles as a meaningful earnings contributor. While the CIE Automotive transaction contributed ₹413 crore, the remaining ₹959 crore came from operating businesses, led by automotive, farm equipment, Mahindra Finance, Tech Mahindra and the Growth Gems portfolio. As per The Economic Times, Group CEO and Managing Director Anish Shah called it a case of "all our businesses coming together," highlighting the benefits of Mahindra's diversified business model despite macroeconomic headwinds.
The sharpest turnaround came from Mahindra's electric-vehicle business, with revenue surging 77% to ₹5,430 crore and EBITDA jumping to ₹613 crore from ₹111 crore, while PBIT swung to a profit of ₹288 crore from a loss of ₹101 crore a year earlier - a ₹389-crore improvement that effectively transformed EVs from an earnings drag into a meaningful contributor to automotive profitability. Executive Director and CEO (Auto & Farm Sector) Rajesh Jejurikar noted that the XEV 9e emerged as India's highest-selling electric SUV by volume during the quarter, while electric vehicles now account for 12% of the company's SUV portfolio with capacity expansion underway to support future demand. The automotive business remained the largest contributor, adding ₹369 crore to the increase in attributable profit, followed by farm equipment at ₹197 crore.
M&M reported exceptional July 2026 performance with overall auto sales growing 26% year-on-year to 1,03,860 vehicles, including exports, compared with the year-ago period. Total sales comprise of domestic sales of 99,790 units (up 25% YoY) and exports of 4,070 units (up 47% YoY). Passenger vehicle sales in the domestic market rose 20% to 60,048 units from 49,871 units in July 2025, with SUV sales including exports standing at 60,887 units. Commercial vehicle sales increased 33% year-on-year to 39,742 units, with light commercial vehicles below 2 tonne jumping 40% to 3,870 units and vehicles in the 2 tonne to 3.5 tonne category growing 21% to 21,334 units. Three-wheeler sales, including electric three-wheelers, surged 53% to 14,538 units. The company's Farm Equipment Business reported 21% growth in domestic tractor sales at 32,643 units, with total tractor sales including exports increasing 20% to 34,420 units from 28,708 units, attributed to improved rainfall, better reservoir levels, and healthy farm cash flows.
Given robust demand, the company is ramping up capacities in the second half (H2) of FY27, adding 10,000 units in internal combustion engine (ICE)-powered vehicles and 4,000 units in battery electric vehicles (BEVs) ahead of launches in FY28. Over the longer term, it plans to double its utility vehicle capacity to 132,000 units per month by FY31. Tractor demand remains healthy given higher mechanisation due to labour shortages, rabi cash flows, and higher government spending. The company is negating cost pressures through price hikes and cost-optimisation initiatives, with Emkay Research expecting margins in the auto segment to improve, though it will depend on input cost trajectory. In the EV business, medium-term profitability will be driven by pricing power, economies of scale, and cost efficiencies. Given commodity-led margin pressures, Emkay Research has cut FY27-FY28 earnings per share by 2-4%, while retaining its 'Buy' rating with a target price of ₹4,100.
PL Capital has reiterated its 'Buy' rating on Mahindra & Mahindra and raised the target price marginally to ₹3,950 from ₹3,900, noting that the management is taking aggressive cost reduction measures and maintaining FY27 volume growth guidance for its SUVs at mid-to-high teens, tractor industry at mid-single digits, and LCV industry at high-single digits. Choice Institutional Equities has reiterated its 'Buy' rating and raised its target price to ₹4,150, valuing the company at 25 times its estimated FY28 earnings while factoring in the value of its subsidiaries. For CLSA, M&M remains its top pick in the auto space on account of sustained utility vehicle market share gains driven by strong execution and upcoming launches, with the brokerage upgrading the stock to 'Outperform' with a target price of ₹4,588. Macquarie analysts believe M&M is in a sweet spot with multiple SUV launches over the next 12-24 months and resilient tractor demand. Rajesh Jejurikar, Executive Director and CEO for the Auto and Farm Sector, reiterated that the company is maintaining its full-year guidance, expecting mid-to-high teen growth in SUVs, high single-digit growth in light commercial vehicles and mid-single-digit growth in tractors.
