Mahindra & Mahindra Shares Rise 5% Following 25% Increase in Q2 Net Profit

Shares of Mahindra & Mahindra (M&M) rose 5 per cent following the company's financial results for the second quarter ended September 30, 2026. M&M reported a 25 per cent year-on-year rise in consolidated net profit attributable to owners, reaching ₹4,588 crore compared to ₹3,673 crore in the corresponding period last year.

The company's bottom-line growth came amid a mixed operational performance across its core auto and farm segments. M&M’s farm EBIT margin stood at 16.8 per cent, marking a decline of 176 basis points quarter-on-quarter. Meanwhile, the auto EBIT margin came in at 7.7 per cent, registering an improvement of 58 basis points quarter-on-quarter.

Following the results, several major brokerages maintained positive stances on the stock. CLSA retained a high-conviction outperform rating with a target price of ₹4,650, designating M&M as its top auto pick. The brokerage highlighted sustained utility vehicle (UV) market share gains driven by strong execution, upcoming product launches, traction in battery electric vehicles (BEVs), ongoing capacity expansion, and attractive valuations. CLSA noted that M&M trades at 15 times FY28CL EPS, compared to its 10-year average price-to-earnings multiple of 17 times.

Citi maintained a buy rating with a target price of ₹4,330, noting that the second-quarter performance exceeded expectations due to better-than-estimated EBITDA margins. Citi reported that management holds a positive outlook on utility vehicles, supported by planned capacity expansion and new launches, alongside improving demand for light commercial vehicles (LCVs).

However, Citi and other brokerages noted headwinds in the agricultural sector. M&M lowered its FY27 tractor volume growth guidance to flat year-on-year trends, shifting from an earlier expectation of 5 per cent growth. The revision was attributed to weak monsoons and low reservoir levels, particularly affecting Maharashtra and Karnataka. In response, Citi modestly increased its earnings estimates while factoring in input-cost pressures and the subdued tractor outlook.

Bernstein also maintained an outperform rating with a target price of ₹4,100, pointing out that the company's next phase of growth will likely require less reliance on the tractor cycle. Bernstein observed that M&M’s wider earnings base proved valuable during the quarter. Standalone EBIT, excluding other income, grew 2 per cent year-on-year, while consolidated EBIT, excluding other income, increased by 19 per cent. Contributions from business segments outside the standalone auto and farm franchises helped the group sustain growth as core operations navigated a more challenging environment.

"Mahindra & Mahindra's latest quarterly performance demonstrates the value of revenue diversification. While agricultural headwinds and lowered tractor volume guidance present challenges due to weak monsoons, the strength in the utility vehicle segment and broader business earnings have offset these pressures. For businesses operating across cyclical sectors, maintaining a balanced portfolio and investing in high-growth segments like electric vehicles and capacity expansion is crucial for sustaining investor confidence during industry downturns." — Dr. Shishir Gupta, Founder & CEO, StartupLanes