The surge in Mahindra & Mahindra (M&M) shares, reaching a new 52-week high, was driven by the company's impressive performance in the March quarter, surpassing market expectations. This prompted several analysts to raise their target prices and upgrade their ratings.
M&M demonstrated 11% year-on-year revenue growth in Q4FY24, with stable quarter-on-quarter margins. The auto segment saw improved margins, while the Farm Equipment Sector (FES) margins increased despite lower volumes, attributed to cost optimization and favorable raw material costs.
Analysts at Jefferies, Goldman Sachs, Morgan Stanley, Kotak Equities, Motilal Oswal, and Nuvama all expressed bullish outlooks on M&M, citing various factors such as the strength of M&M’s SUV portfolio, stabilization of the tractor segment, robust demand for utility vehicles, and positive future growth prospects.
However, CLSA downgraded M&M to a 'sell' rating, suggesting that the stock may be fairly priced after its recent gains.
While M&M's strong Q4 performance and positive analyst outlook have contributed to the rally, the sustainability of this upward trend will depend on various factors including market conditions, company announcements, and macroeconomic factors. Investors should closely monitor developments in the automotive and agricultural sectors, as well as any updates from M&M regarding its business strategies and growth plans.
