Buy or Sell: M&M Share Price Target 2024, 2025, 2030, 2035 Long-Term Prediction

About M&M Company

Mahindra & Mahindra (M&M) is a leading Indian multinational corporation that operates in a diverse range of industries, including automotive, farm equipment, aerospace, defence, tourism, and more. Founded in 1945, the company has grown to become a major player in the Indian economy, with a strong focus on innovation, sustainability, and customer satisfaction.

M&M’s automotive division is one of its core businesses, with a wide range of products that cater to different segments of the market. The company’s portfolio includes automobiles, tractors, two-wheelers, trucks, and more. M&M has a strong presence in the Indian market, with a market share of over 30% in the tractor segment and over 7% in the passenger vehicle segment.

In recent years, M&M has also expanded its presence in the global market, with a focus on emerging markets such as Africa, South America, and Southeast Asia. The company has established joint ventures and partnerships with local players in these markets to leverage their expertise and gain a foothold in these regions.

The company has made significant investments in electric vehicles and renewable energy, intending to achieve 50% of its energy requirements from renewable sources by 2025. M&M’s electric vehicle subsidiary, Mahindra Electric, is focused on developing affordable and reliable electric vehicles for the Indian market.

 Financial of M&M

Conduct a SWOT analysis of M&M Share based on its financials. We will break down the key elements of strengths, weaknesses, opportunities, and threats using the financial data.

Strengths–

Increasing Total Revenue: M&M’s total revenue has shown a consistent increase over the years, growing from ₹732,650.5 million in 2020 to ₹1,294,971.1 million in the trailing twelve months (TTM). This indicates a strong market presence and an ability to grow income.

Robust Gross Profit: The gross profit has also been on an upward trajectory, from ₹347,895.3 million in 2020 to ₹493,575.4 million in TTM. This suggests effective cost management and strong pricing power.

Steady Net Income Growth: There’s a significant increase in net income for common stockholders, which rose from ₹1,270.4 million in 2020 to ₹111,693.9 million in TTM. This highlights the company’s ability to enhance its profitability over time.

Weaknesses–

High Cost of Revenue: The cost of revenue is quite substantial, at ₹801,395.7 million in TTM. This could indicate high production or operational costs that might affect overall profitability.

Increasing Total Expenses: Total expenses have risen considerably, from ₹861,765.3 million in 2020 to ₹1,118,800.9 million in TTM, which could be a concern if not managed effectively.

Negative Operating Cash Flow in TTM: The operating cash flow is negative at ₹-69,441.7 million in TTM, which might suggest issues in cash flow management or operational inefficiencies.

Opportunities–

Market Expansion: With increasing revenues, M&M has the opportunity to expand into new markets or diversify its product offerings to maintain its growth trajectory.

Leveraging Strong Net Income: The significant increase in net income could be reinvested into the business for R&D, marketing, or expanding operational capacities.

Debt Management: With prudent financial management, the company can focus on reducing its debt burden, as seen in the substantial issuance and repayment of debt figures.

Threats–

Economic Fluctuations: As a large company, M&M is susceptible to economic downturns or market volatility, which can affect its revenue and profitability.

Competitive Industry: In a competitive sector, maintaining market share and profitability is always a challenge, especially with rising expenses.

Interest Expenses: With high-interest expenses (₹66,529.4 million in TTM), fluctuating interest rates could pose a threat to the company’s financial stability.

An effective method for evaluating the M&M share price Target is by examining research reports and analyses conducted by reputable financial institutions and brokerage firms. The latest research reports are available on M&M.

M&M Share Price Target

The financial services firm Motilal Oswal published the latest research report on M&M Share Price Target, assigning a ‘buy’ rating with a share price target of Rs. 2,005 from its current market price of Rs. 1,656.

M&M has been proactive in launching new models, expanding margins in its core business, and demonstrating prudent capital allocation. These efforts have resulted in an impressive earnings CAGR of approximately 11% over FY19-23. Additionally, the anticipated launches in the Electric Vehicle (EV) category have contributed to a substantial re-rating of the company’s stocks. Over the past two years, M&M has outperformed the Nifty index significantly, with a CAGR of around 44% compared to Nifty’s 12%.

Looking forward, M&M is expected to continue its strong performance, projecting revenue, EBITDA, and PAT CAGR of approximately 12.5%, 15%, and 17% respectively over FY23-26E. The company’s implied core Price to Earnings (P/E) ratio stands attractively at 18.1x/16.4x for FY24E/FY25E EPS, compared to its peers.

In the Passenger Vehicle (PV) segment, M&M is well-positioned to outperform, driven by its strong foothold in the SUV market and a robust order backlog. The company is expected to achieve approximately 14% volume CAGR for its Passenger SUVs over FY23-26E.

The Light Commercial Vehicle (LCV) industry is another area where M&M is expected to excel. Despite the industry likely to experience only a low single-digit growth in the coming years, M&M, with its significant market share in the 2.0-3.5T goods segment, is anticipated to outperform in this category.

For the tractor industry, FY24 has been challenging due to various factors, including lower monsoon and mismatched festive timings. However, FY25 is expected to be more favourable, with healthier reservoir levels and better festive timings. M&M’s tractor volumes are predicted to grow at a CAGR of around 3% over FY23-26, buoyed by the anticipated industry recovery, new launches, and growth in export markets.

M&M’s venture into the EV market also adds to its growth prospects. The company has formed partnerships with marquee investors like Temasek and British International Investment for its electric vehicle subsidiary, Mahindra Electric Automotive Limited (MEAL). With a target to achieve 20-30% of its SUV sales from EVs by 2030, M&M has marked significant investments in this sector. The valuation of MEAL stands at around INR545.5 billion, with M&M holding a significant stake.

Considering the overall performance and future prospects, the valuation for M&M remains attractive compared to its peers. The stock is trading in line with its five-year average core P/E, reflecting its strong performance and market share gains. Maintaining a BUY rating, the share price target for M&M is set at INR 2,005, marking a 21% increase from its current market price (CMP) of INR 1,656.

We will analyze the performance of the company’s shares in recent times and provide you with a well-researched M&M Share Price Target 2024, 2025, 2030 to 2050 based on our Research knowledge and forecasting.

Peer Comparison of M&M

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