Volume gains, recovery in PV segment could drive rerating of M&M stock

New product launches, better capital allocation and valuations are the other triggers

Volume upgrades for FY21 after the performance in August, easing concerns on capital allocation, and valuations are expected to have a positive impact on the financials and stock trajectory of Mahindra & Mahindra (M&M). The stock is up 124 per cent since the start of this financial year and it may see further gains, given volume and earnings upgrades going ahead. 

The key trigger for upgrades is the tractor segment, which posted 69 per cent growth in domestic tractor volumes. The utility vehicle segment also had a better-than-expected showing, with 3 per cent growth. This puts to rest worries over volume