M&M Share Price Target 2025: Auto Maker's Stock Price Zooms After Healthy Q4 Results - Buy, Sell or Hold?

Emkay Global has revised its target price for Mahindra & Mahindra (M&M) upwards by 11% to Rs 3,000, maintaining an “Add” rating on the stock. The brokerage firm cited a robust pipeline of upcoming vehicle launches and better-than-expected margin performance—despite near-term pressures from electric vehicle (EV) expansion—as key reasons for its bullish outlook.

In its latest report, Emkay Global highlighted M&M’s strong Q4FY24 results, noting healthy operational performance across both Auto and Tractor segments. Revenue rose 24% year-on-year to Rs 31,600 crore, driven by a 19% increase in volumes and an 11% quarter-on-quarter (QoQ) improvement in average selling price (ASP).

However, M&M's EBITDA margin dipped 116 basis points sequentially to 13.3%, due to higher operating expenses, despite improved gross margins.

Auto EBIT margin came in at 9.2%, but excluding the impact of Born EVs, the core Auto margin stood at 10%, up by around 30 basis points (bps). M&M's Tractor business performed even better, with EBIT margins rising 134 basis points QoQ to 19.4%. Adjusted profit after tax rose 22% year-on-year to Rs 2,440 crore.

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Future Growth Drivers

Emkay expects M&M’s outperformance relative to the broader passenger vehicle (PV) industry to continue in FY26, supported by the full-year impact of successful rollouts of the XUV 3X0 and Thar Roxx sport utility vehicles (SUVs). The company is also seeing growing export traction in markets such as South Africa and Australia.

To support its growth trajectory, M&M has lined up several new launches, including one new internal combustion engine (ICE) SUV and two new battery electric vehicles (BEVs) in calendar year 2026. Over the longer term, the company aims to roll out five new models each in the ICE SUV, BEV, and light commercial vehicle (LCV) categories by 2030.

M&M's auto manufacturing capacity is projected to grow from 61,500 units/month in FY25 to 85,000 units/month by FY27—including 18,000 units/month of BEV capacity. Additionally, a new 1.2 lakh-unit annual capacity is being added at the Chakan plant for a new platform set to debut on August 15, 2025, with greenfield expansion plans also underway for FY28 and beyond.

EV Margins and PLI Incentives

Despite BEVs being a margin-dilutive segment in the short to medium term, M&M is mitigating risks through a favorable product mix, cost optimization, and benefit accrual under the government’s Production-Linked Incentive (PLI) scheme. Emkay noted that the margin drag from BEVs will be absorbed by M&M’s EV arm, MEAL, insulating the core Auto business from direct impact.

Mahindra revealed that it is not planning immediate price hikes for BEVs and is instead focusing on enhancing profitability through scale, lower battery costs, and internal cost-saving measures. The certification of its 9E model, expected in Q2FY26, will trigger PLI-linked gains retroactively from the start of sales.

Outlook and Valuation

Emkay has raised M&M's FY26 and FY27 core earnings per share (EPS) estimates by 6.5% and 5%, respectively, factoring in higher volumes, improved margins in the Auto segment, and reduced drag from EV operations. The revised target price of Rs 3,000 is based on a sum-of-the-parts valuation, with a 25x P/E multiple for the core business, as per Emkay Global.

“While EVs may weigh on near-term margins, M&M’s diversified product portfolio, expansion plans, and strategic EV transition support a balanced risk-reward profile,” the brokerage said.

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