Mahindra and Mahindra (M&M) shares surged by over 7% in early trade on Friday, reaching a record high of Rs 2,554.75 per share on the Bombay Stock Exchange (BSE). This rise came on the heels of the company's robust financial results for the fourth quarter of FY24, prompting analysts to revise their target prices for the stock upwards.
In Q4 FY24, M&M reported a net profit of Rs 2,038.21 crore, marking a significant 31.6% increase from the same period last year. Additionally, the company's revenue from operations witnessed a notable growth of 11.24% year-on-year, reaching Rs 25,108.97 crore.
Despite a 20% decrease in tractor sales to 71,039 units, the automobile segment saw a 14% increase in volumes to 2,15,280 units, contributing to the overall positive performance.
Following these impressive results, several brokerage firms expressed bullish sentiments towards M&M shares:
- Nuvama Institutional Equities highlighted strong revenue visibility in M&M's auto segment and raised its target price to Rs 2,760.
- Jefferies upgraded M&M to a 'buy' rating and raised the target price to Rs 2,910, noting that the stock's valuations are still 20% lower than the peer average.
- Morgan Stanley maintained an 'overweight' rating, expecting M&M to remain the fastest-growing passenger vehicle manufacturer.
- Motilal Oswal Financial Services raised its EPS estimates for FY25 and FY26 and set a new target price of Rs 2,720, expecting strong growth over FY24-26.
- Emkay Global Financial Services praised M&M's revenue growth and stable margins, raising its target price to Rs 2,550.
- Kotak Institutional Equities increased its EPS estimates and target price, retaining an 'Add' rating.
- CLSA, however, downgraded M&M to 'sell' from 'outperform', citing fair pricing after the recent rally.
Despite the varied opinions, the surge in M&M's share price underscores the market's positive response to the company's strong quarterly performance and optimistic outlook from analysts. As of 11:20 AM, M&M shares were trading at Rs 2,519.50 on the BSE, reflecting a 6.18% increase.
