Shares of Mahindra & Mahindra Ltd. surged over 7% to hit a record high on Thursday as brokerages raised their target price after its net profit rose 61% in the third quarter.
M&M Q3 FY24 Earnings Highlights (Standalone, YoY)
Revenue up 16% at 25,642.4 crore (Bloomberg estimate: Rs 25,300.9 crore)
Ebitda up 9.7% 3,590.3 crore (Bloomberg estimate: Rs 3,208.3 crore)
Ebitda margin expands to 14% (Bloomberg estimate: 12.7%)
Net profit up 61% at Rs 2,454 crore (Bloomberg estimate: Rs 2,375.6 crore)
Most brokerage firms have raised the target price for the stock.
Nuvama reiterated its 'buy' rating for the stock and raised its target to Rs 2,080 from Rs 2,010, implying a return potential of 20.68%. It cited a production ramp-up and EV plans as stock catalysts.
Citi Research has also raised the target price to Rs 1,890 from Rs 1,750 earlier, implying a return potential of 9.6%. It said the margin offset slightly weaker realisations in the quarter.
Jefferies Financial Group Inc. raised the price target to Rs 1,615 from Rs 1,580, implying a return potential of 6.32%. However, it has a hold rating for the stock. "We believe (the) stock is unlikely to deliver meaningful returns until tractor demand visibility improves."
Bernstein Research has an 'outperform' rating for the stock with a target price of Rs 1,880, implying a return potential of 9.05%.
"M&M sports reasonable valuations relative to the broader market and within the auto sector," it said. "While Q4 lacks catalysts, we see a bottoming of tractors and new launches in SUVs along with continued strength in demand to support sufficient-enough earnings growth to aid outperformance."
On the NSE, M&M's stock rose as much as 7.28% during the day to Rs 1,777.75 apiece, its lifetime high. It was trading 6.7% higher at Rs 1,768 per share, compared to a 0.44% advance in the NSE Nifty 50 Index at 1:45 p.m.
The share price has risen 39.4% in the past 12 months. The total traded volume so far in the day stood at 2.69 times its 30-day average. The relative strength index was at 65.50.
Out of 41 analysts tracking the company, 36 have a 'buy' rating on the stock and five recommend a 'hold', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 6.4%.
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