Mahindra & Mahindra shares jumped over 3% in early trade on Friday following stellar Q1 FY27 results, with the stock rising as much as 3.4% to ₹3,389.05 on the BSE. The automaker's market capitalisation crossed ₹4.17 lakh crore, reflecting strong investor confidence in the company's performance. The stock has gained nearly 10% over the past month, though it remains down more than 11% year-to-date. Multiple brokerages reiterated bullish calls, with sentiment boosted by expectations of automotive margin improvements through pricing actions, cost optimisation and operating leverage.
The company delivered exceptional Q1 FY27 results with consolidated net profit rising 34% year-on-year to ₹5,455 crore and revenue increasing 28% to ₹58,188 crore. As reported by multiple sources, the auto and farm businesses continued to drive growth, with segment profits rising 18%, while the financial services business posted 13% growth in assets under management. Group CEO Anish Shah noted the company delivered a strong start to FY27 despite macroeconomic headwinds, supported by its diversified portfolio and leadership positions in auto and farm businesses.
Global brokerage CLSA upgraded M&M to 'High Conviction Outperform' from 'Outperform' and raised its target price to ₹4,588, citing automotive EBIT margins broadly in line with expectations despite elevated raw material costs. Nomura maintained its 'Buy' rating with a target price of ₹4,875, expecting profitability recovery through further price hikes and noting attractive valuations at 12.4x FY28 estimated EV/EBITDA. Domestic brokerage Motilal Oswal retained its 'Buy' rating with a target price of ₹4,108, citing healthy product pipeline and strong management guidance. JM Financial maintained its 'Buy' recommendation with a revised target price of ₹3,905, while Choice Broking reiterated its 'Buy' rating with a revised target price of ₹4,150.
Management provided optimistic guidance for FY27 across all business segments, with mid-single-digit growth expected in the tractor industry, mid-to-high teens growth in the SUV segment, and high-single-digit growth in the light commercial vehicle industry. The company expects automotive margins to improve from the second quarter through pricing actions, operating leverage and cost optimisation, while farm profitability is likely to strengthen in the second half as seasonal demand improves and commodity inflation eases. M&M plans to expand SUV production capacity from 64,500 units per month currently to 68,000 units by the end of first half FY27, and further to 82,000 units per month by the end of fiscal year.
