LKP Research Suggests Buying Mahindra And Mahindra, Sets Target Price at Rs 4225

Mahindra And Mahindra Posts Steady Q4FY26 Performance

Mahindra And Mahindra (M&M) has reported a steady performance in the fourth quarter of fiscal year 2026 (Q4FY26), with standalone revenue rising by 26.2% year-over-year (YoY) to ₹395 billion. The company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin was lower by 140 basis points (bps) both quarter-over-quarter (QoQ) and YoY to 14.2%, primarily due to increasing commodity costs.

Financial Performance

M&M's Profit Before Tax (PBT) stood at ₹49.8 billion, up 22.6% YoY and 11.6% QoQ. Adjusted Profit After Tax (PAT) came in at ₹38.4 billion, growing 21.7% YoY and 31.7% QoQ. Segment-wise, the Automotive business posted revenue of ₹311 billion, up 25% YoY, while the Farm Equipment segment reported revenue of ₹84.4 billion, up 32% YoY.

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The EBIT margin for the Automotive segment was up by 20 bps YoY to 9.5%, while the Farm Equipment segment saw margins steady at 19.4% YoY, but down by 80 bps QoQ.

Outlook

LKP Research has reiterate its BUY recommendation for M&M with a reduced target price of ₹4,225. The target price is based on a Sum-of-the-Parts (SA) value of ₹3,789 valued at 21x fiscal year 2028 estimated earnings and a subs value of ₹436. The research firm has cut down its estimates and target price on the back of higher commodity costs, heightened competition, and moderation expected in the Farm Equipment segment.

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