India’s Passenger Cars & Utility Vehicles sector achieved record sales of 4.32 million units in FY2024- 25, up 2–2.5 percent year-on-year, with Utility Vehicles driving growth and capturing 65 percent of the segment. Exports also hit a high at 0.77 million units, rising 14.6 percent, reflecting strong domestic demand and increasing global interest in Indian-made vehicles.
With a market capitalization of Rs 3.84 lakh crore, the shares of Mahindra & Mahindra Ltd were trading at Rs 3,095.00 per share, increasing around 0.57 percent as compared to the previous closing price of Rs 3,069.50 apiece.
Brokerage Recommendations & Rationale
Jefferies, one of the well-known brokerages globally, gave a ‘Buy’ rating on the automobile stock with a target price of Rs 4,000 apiece, indicating a potential upside of 30 percent from Wednesday’s price of Rs 3,087 per share.
Jefferies sees potential for further re-rating in M&M, citing strong growth prospects and solid fundamentals. Further, brokrage added, M&M posted its 12th straight quarter of double-digit EBITDA growth. Jefferies forecasts 12 percent volume CAGR and 18 percent core EPS CAGR over FY25–28.
Financial & Operational highlights
Looking forward to the company’s financial performance, revenue magnified by 20 percent from Rs 35,452 crore in Q4FY24 to Rs 42,599 crore in Q4FY25, Further, during the same time frame, net profit jumped by 13 percent from Rs 3,125 crore to Rs 3,542 crore.
Recently, the company signed agreements to acquire 63,62,306 shares (43.96 percent) of SML Isuzu from Sumitomo Corporation and 21,70,747 shares (15 percent) from Isuzu Motors at Rs 650 per share. The total deal, worth approximately Rs 554.64 crore, is subject to statutory and regulatory approvals, significantly increasing the company’s stake in SML.
The acquisition aims to strengthen M&M’s position in the >3.5T commercial vehicle segment, where it currently holds a 3 percent market share. This move is expected to double its share to 6 percent, with targets of reaching 10–12 percent by FY31 and over 20 percent by FY36, building on recent growth momentum.
Additionally, the company will make an open offer to acquire up to 37,62,628 equity shares (26 percent stake) of SML from eligible public shareholders at Rs 1,554.60 per share. This move, under SEBI’s Takeover Regulations, is subject to necessary statutory and regulatory approvals, further strengthening the company’s control over SML.
Market Leadership
M&M capitalized on market leadership in FY25, with 20 percent volume growth in SUVs, record margins, and rising market shares in SUVs (22.5 percent) and LCVs (51.9 percent). The farm segment saw a 43.3 percent market share, 18 percent FM revenue growth, and improved margins. PAT stood at Rs 5,907 crore (Auto) and Rs 3,792 crore (Farm).
M&M plans to ramp up total monthly auto capacity from 61.5k in FY25 to 85k by FY27, including a BEV rise to 18k. SUV capacity will reach 67k. Key initiatives include a 3k boost for XUV3XO and Thar Roxx, a 1.2L p.a. Chakan platform, and a new greenfield plant for FY28+.
Written by Abhishek Singh
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