Brokerages remain cautiously optimistic on M&M post Q3; stock down 2%

The selling pressure on the counter came after brokerages remained cautiously optimistic on M&M post its Q3FY26 numbers released on Tuesday, during market hours

Mahindra & Mahindra (M&M) share price slipped 1.5 per cent on BSE, registering an intra-day low at ₹3,619.2 on BSE. At 9:31 AM, M&M shares were trading 1.38 per cent lower at ₹3,624.05 per share. In comparison, the BSE Sensex was down 0.46 per cent at 83,842.94. 

 

The selling pressure on the counter came after brokerages remained cautiously optimistic on M&M post its Q3FY26 results released on Tuesday, during market hours. 

 

In the December quarter, M&M posted a 47 per cent year-on-year (Y-o-Y) rise in net profit for Q3FY26 to ₹4,675 crore while riding on the best-ever quarterly revenues of ₹52,100 crore, up 26 per cent. Excluding the impact of the New Labour Codes (of around ₹565 crore), net profit was up 54 per cent, the company said. Check detailed results here. 

Brokerages’ view on M&M Stock

Nomura | Buy | Target raised to ₹4,662 from ₹4,355

Nomura said Mahindra & Mahindra (M&M) reported a strong third quarter, with revenue rising 26 per cent Y-o-Y, though marginally below its estimate due to a dip in average selling prices (ASPs) for battery electric vehicles (BEVs) and the run-down of the XUV700 model. 

 

The brokerage raised its earnings estimates and lifted its sum-of-the-parts (SOTP)-based target price, implying 27 per cent upside, while maintaining M&M as its top original equipment manufacturer (OEM) pick.

 

Nomura raised its overall volume estimates by 4–7 per cent. For SUVs, it now estimates volumes at 652,000 (18 per cent) for FY26F, 739,000 (13 per cent) for FY27F, and 814,000 (10 per cent) for FY28F, driven by premiumisation and a strong model cycle. It also raised tractor volume growth to 24 per cent/5 per cent for FY26/27F (10 per cent higher). The brokerage expects ASPs to recover from Q4 onward.

 

Nomura's revised FY26–28F Earnings before interest, tax, depreciation and amortisation (Ebitda) margins are at 14.3 per cent/14.9 per cent/15.1 per cent (10–20 basis points (bps) lower), but higher other income drives a 5 per cent/3 per cent/4 per cent rise in earnings per share (EPS) for the respective years. It believes EV Ebitda margins could rise to double digits as the portfolio becomes eligible for Production-Linked Incentives (PLI) in FY27.  ALSO READ | Lenskart Solutions hit all-time high on posting Q3; brokerages hike TP

Motilal Oswal Financial Services | Buy | Target cut to ₹4,378 from ₹4,521

Motilal Oswal believes M&M is well placed to outperform across its core businesses, led by a healthy recovery in rural areas and new product launches in both utility vehicles (UVs) and tractors. 

 

The brokerage estimates M&M to post a compound annual growth rate (CAGR) of 18 per cent/18 per cent/20 per cent in revenue/Ebitda/profit after tax (PAT) over FY25-28. 

 

While M&M has outperformed its own targets of earnings growth and return on equity (RoE) of 18 per cent, it remains committed to delivering 15-20 per cent EPS growth, ensuring sustained profitability and shareholder value.   ALSO READ | LG Electronics sees worst intraday fall post listing, slides 8% post Q3

JM Financial Institutional Securities | Add | Target cut to ₹4,000 from ₹4,032

The brokerage said M&M reported a steady third-quarter performance with an Ebitda margin of 14.7 per cent, as management significantly upgraded its FY26 domestic tractor industry growth guidance to 24–25 per cent, up from earlier low double-digit estimates. 

 

According to JM Financial, this constructive outlook is supported by GST rationalisation and a shift toward higher-horsepower models, while the auto segment continues to see strong "uptrading" across variants. To support this demand, the company is undertaking capacity debottlenecking to add 3,000–5,000 units per month by mid-2026 and plans a robust launch pipeline including two new ICE models and two refreshes in CY26. 

 

While M&M implemented a 1 per cent price hike in January to mitigate persistent commodity headwinds in iron and precious metals, JM Financial maintained its ‘Add’ rating with a target price of ₹4,000, noting that chip supply and CAFÉ norm compliance remain key monitorables.

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.