In this article, we look at two Mahindra Group stocks, one from the Automobiles sector and another from the Financial Services sector, recommended by the Trade Brains Portal to buy for an upside potential of up to 20%. We also analyzed the market’s performance yesterday to understand what may lie ahead for the stock indices in the coming days.
Mahindra & Mahindra Ltd
- CMP: ₹ 3,045
- Target: ₹ 3,550
- Upside: 17%
- Time frame: 12 Months
Why it’s recommended
Founded in 1945, Mahindra & Mahindra Ltd. is the most diversified automobile company in India. Apart from 2W, 3W, PVs, CVs, tractors, and earthmovers, the group is present in over 20 industries across financial services, auto components, IT, and other industries. M&M has a 22.55% revenue market share in the SUV car segment, and it is the market leader of the country’s tractor segment with a 43.3% market share. It has its footprints in over 100 countries with headquarters in Mumbai and 69 manufacturing facilities around the world.
M&M continues to hold the 2nd position in the SUV market by volume, with SUV volume growing by 20%. Similarly, it holds the No. 1 position in the electric SUV and electric passenger vehicle segments. It also holds the 2nd position in the farm equipment market in the country and achieved a revenue growth of CAGR 9.3% in FY25. On the expansion side, the company is planning for a capacity expansion of Thar from 9,500 to 11,000 per month and 3XO from 9,500 to 11,000 per month and also creating new platform capacity in Chakan of 1.2 lakh p.a. Furthermore, it is also planning for a greenfield plant for a new set of products from FY28 and beyond.
For May 2025, its overall auto sales stood at 84,110 vehicles, a growth of 17%, including exports. In the utility vehicles segment, Mahindra sold 52,431 vehicles in the domestic market, marking a growth of 21%, and overall 54,819 vehicles, including exports. The domestic sales for commercial vehicles stood at 21,392.
The company holds a strong position in its scalable growth gems category of business and targets a valuation of $2-3 billion in each of its segments (logistics, hospitality, real estate, last-mile mobility, Susten, trucks & buses, etc.) and in its emerging growth gems category of business, it targets $1 billion in each of its segments (Accelo, Aerostructure, Classic Legends, cars & bikes, etc.).
Risk Factor
The automotive industry is intensely competitive, with both domestic and international players in the Indian market; hence, such competition can lead to pricing pressures that affect profit margins. Additionally, the cyclical nature of the automotive industry poses challenges, as demand for vehicles, particularly in the commercial segment, is closely tied to economic conditions.
Mahindra & Mahindra Financial Services Ltd
- CMP: ₹ 262
- Target: ₹ 315
- Upside: 20%
- Time frame: 12 Months
Why it’s recommended
Incorporated in 1991, Mahindra & Mahindra Financial Services Ltd. is one of India’s leading non-banking financial companies (NBFCs), dedicated to delivering quality financial products and solutions to a diverse customer base across India, including rural and semi-urban areas. They have assets under management (AUM) of $14.1 billion, with their presence spanning 516,000 villages and 8,000 towns, operating through 1,365+ branches across 27 states and 7 Union Territories, supported by 6,000+ dealers and 10 original equipment manufacturers (OEMs), and serving 11 million customers nationwide.
Their financial products include vehicle loans, SME finance, personal loans, insurance broking, housing finance, fixed deposits, and mutual fund schemes. In FY25, their AUM grew by 3.6% to Rs 60,741 crore compared to Rs 58,647 crore in FY24. The total income increased 16% YoY to Rs 18,530 crore, and profit after tax surged 16% to Rs 2,261 crore. The company’s loan book marked a growth of 17% YoY, reaching Rs 1,16,214 crore. On a year-on-year basis, the cash and cash equivalents were at Rs 1,830 crore, doubling in a year. The loans & advances increased to Rs 1,23,514 crore, a 16% increase YoY. The company’s long-term provisions remained stable, indicating a good sign of recovery.
Additionally, the company has maintained stable asset quality with credit cost standing at 1.3%, net interest margin at 6.5%, and gross stage 3 (GS3) at 3.7%. The company has taken continuous efforts to target resilient customers, streamline processes in underwriting through integrations with third-party APIs, and enhance collection efficiencies through analytics-driven bounce prediction, PQA, efficient stockyard management, etc.
The company’s leadership position was further strengthened as they noted that M&M and Swaraj have significantly higher incremental market shares, with overall growth of 8% YoY. On the diversification front, its SME segment has delivered 48% disbursement growth during the year, holding a 5% share in overall disbursement. Tractors saw one of the stronger performances (grew by 3%), followed by passenger vehicles (rising by 8%), holding 10% and 41%, respectively, in overall disbursement.
Risk Factor
Potential defaults and an increase in non-performing assets, particularly in rural lending segments, pose a credit risk to M&M Finance. Despite having a robust structure for managing liquidity, the company is vulnerable to liquidity concerns due to its reliance on many funding sources, especially during volatile market times.
Market Recap June 5th, 2025
The broad indices opened on a positive note ahead of the RBI MPC meeting on June 6th, as the market anticipates another 25 basis point rate cut. Nifty 50 opened above the 20-day EMA in the daily time frame at 24,691.20, peaking at 24,899.85 and closing at 24,750.90, gaining 130.7 points, or 0.53%. Similarly, BSE Sensex mirrored the optimism, opening at 81,196, surging to 81,911, and closing at 81,442.04, up by 443.79 points, or 0.55%. Both the indices traded above all four 20/50/100/200 EMAs, with Nifty 50 RSI at 55.14 and BSE Sensex RSI at 54.84 (well below the overbought zone of 70).
On the sectoral front, the Nifty Realty index was the top gainer, closing at 993.1, up by 17.1 points, or 1.75%. Realty stocks, including Sobha Ltd., Brigade Enterprises, Prestige Estates, DLF Ltd., and Godrej Properties Ltd., were the major gainers, surging up to 6%. The Nifty Pharma index followed the lead with gains of 272.5 points, or 1.28%, closing at 21,644.2. Glenmark Pharma, Dr. Reddy’s, Laurus Labs, Lupin Ltd., and Zydus Lifesciences took the lead with gains of up to 5%.
The Nifty PSU Bank index was the major laggard, losing 41.2 points, or 0.58%, closing at 7,059.65. Bank of Baroda, Indian Overseas Bank, Bank of Maharashtra, Punjab & Sind Bank, and Canara Bank lost up to 2%, dragging the index down. The Nifty Private Bank Index was also in the red, closing at 27,342.40, down by 26.55 points, or 0.10%.
Globally, the Asian markets were also on a positive note, with the majority of the indices closing in green. Korea’s Kospi index rose by 41.21 points, or 1.49%, closing at 2,812.05. This comes after its newly elected president was sworn in on Wednesday. Furthermore, Hong Kong’s Hang Seng Index rose by 252.94 points, or 1.07%, closing at 23,906.98, whereas Japan’s Nikkei 225 declined by 193 points, or 0.51%, closing at 37,554.49. On the US markets, the Dow Jones Futures gained 0.2%, or 80 points, as the major companies in the US will report their quarterly earnings, and the major trade deals between the US and Germany and the US and China are anticipated to be held this week.
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