M&M shares rally 10% in 4 days on healthy outlook. Buy, Sell, Hold?

Tractor delivery momentum is expected to continue in Q1FY26 on expectation of very good Rabi crop harvest and improved cash flow in the hands of the farmers.

M&M share price today: Mahindra & Mahindra (M&M) shares have gained 3 per cent to ₹2,899.90 on the BSE in Wednesday’s intra-day trade. The stock of the passenger cars & utility vehicles maker is quoting higher for the fourth straight trading day, surging 10 per cent during the period. In the past nine trading days, it has rallied 16 per cent.

 

M&M share past price movement  Shares of M&M had hit a record high of ₹3,276.30 on February 10, 2025. Currently, the stock is trading 11 per cent lower from its record high price. In the past one year, M&M has outperformed the market by soaring 40 per cent. In comparison, the BSE Sensex was up 8 per cent, while the BSE Auto index was down 0.4 per cent.

 

 

Tractor industry performance   The tractor industry has been witnessing good momentum on account of favorable weather conditions, good reservoir levels, strong Rabi outlook and positive terms of trade for farmers. The harvest season has commenced in the northern regions and is expected to progress smoothly across the country. Delivery momentum picked up in the last week of March on account of festivities and momentum is expected to continue in the June quarter (Q1FY26) on expectations of a very good Rabi crop harvest and improved cash flow in the hands of the farmers.  Also Read: Why did M&M Financial slip 4% post Q4 results? Here's what brokerages say

 

Outlook of Domestic Farm Equipment Industry According to media reports based on a Crisil Ratings note, India’s domestic tractor sales are projected to reach a record 975,000 units in financial year 2025-26 (FY26), growing at 3-5 per cent year-on-year (YoY), driven by higher minimum support prices for key cash crops, robust replacement and construction demand, and optimism over an above-normal monsoon. 

 

The industry is entering a ₹4,000-crore capex cycle as capacity utilisation nears 75-80 per cent, with manufacturers preparing for the stricter TREM V emission norms effective April 2026, which are expected to increase tractor prices by 10-20 per cent depending on engine capacity and may spur pre-buying before the new rules take effect.  Also Read: Tech Mahindra Q4 results: check date, time, expectations, dividend

 

Brokerage views – ICICI Securities, Motilal Oswal Financial Services

 

Despite the changes for TREM V emission norms (implementation date still uncertain), tractor makers are well-positioned with stable operating margins of 13-13.5 per cent, low debt, and strong liquidity, enabling them to invest in capacity expansion and cleaner technologies. According to ICICI Securities, overall, the projected growth is sentimentally positive for M&M given its industry leadership in domestic tractor space (market share: ~44 per cent). Key monitorable would be the industry players' commentary and associated volume growth guidance during Q4FY25 conference calls, the brokerage firm said in a note.

 

The brokerage firm expects M&M to continue its strong performance led by its robust Utility Vehicle (UV) portfolio, market share gains in both Sports Utility Vehicles (SUVs) and tractors, improving margin trajectory, and better outlook in Farm Equipment Sector (FES). Analysts have a ‘buy’ rating on M&M with a target price of ₹ 3,220 per share.

 

Motilal Oswal Financial Services believes M&M is well placed to outperform across its core businesses, driven by a healthy recovery in rural and new product launches in both UVs and tractors. While M&M has outperformed its own targets of earnings growth and RoE of 18 per cent in FY24, it remains committed to delivering 15-20 per cent EPS growth and 18 per cent ROE, ensuring sustained profitability and shareholder value, the brokerage firm had said in Q3 result update. 

 

About Mahindra

 

Founded in 1945, the Mahindra Group is one of the largest and most admired multinational federation of companies with 260,000 employees in over 100 countries. It enjoys a leadership position in farm equipment, utility vehicles, information technology and financial services in India and is the world’s largest tractor company by volume. It has a strong presence in renewable energy, agriculture, logistics, hospitality and real estate.