M&M shares rise 4% post robust Q3 show, brokerages bullish

Shares of Mahindra and Mahindra Limited surged 4 percent to Rs 1,720 in early trade on February 15 after the company announced a 60 percent increase in net profit on-year to Rs 2,454 crore. A strong performance of the automotive segment, coupled with a favourable product mix and the benefits of operating leverage, has been the driving force behind the positive results.

At 9:18 am, the stock was trading at Rs 1,713, up 3.3 percent from the previous close on the NSE. In the last three months, the stock has given a return of almost 8 percent.

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In the third quarter, the Mumbai-based automaker recorded a 16 percent year-on-year growth in revenue, reaching Rs 25,642.4 crore. This robust performance was driven by a growth in volumes within the automotive segment. To provide context, the turnover during Q3FY23 amounted to Rs 21,653.74 crore.

Also read: Mahindra & Mahindra Q3 results draw bullish analyst calls, CLSA, HSBC, Nomura say ‘buy’

Following the results, multiple brokerages have issued bullish calls on the stock. Analysts across firms believe that a strong SUV vertical will support growth. “Quite optimistic of the structural growth of SUVs in India and strong positioning of the company,” Nomura said. Not just that, the company’s SUV and electric vehicle model cycle is strong and the company’s growth will remain well ahead of the industry.

HSBC suggests that an increase in passenger vehicle market share is likely to continue in FY25. The tractor business, which remained weak for the last two years, could stabilise in the coming quarters but monsoons are key for demand.

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