Shares of SUV major Mahindra & Mahindra (M&M) rose as much as 3% to the day’s high of Rs 3,365 on the BSE on Friday after it reported a 7% year-on-year (YoY) rise in standalone net profit for the June quarter.

Standalone profit came in at Rs 3,685 crore compared to Rs 3,450 crore in the corresponding quarter last year, while revenue from operations grew 23% YoY to Rs 41,920 crore.

Should you buy, sell or hold M&M shares?

Morgan Stanley has maintained its Overweight rating on M&M with a target price of Rs 4,222, an upside of 29% from current levels. The brokerage said standalone revenue and EBITDA posted YoY growth in the first quarter of FY27. While EBITDA came in marginally below estimates, the overall performance remained healthy.

Farm margins exceeded forecasts, although the auto business came in slightly below estimates. Backed by a strong product pipeline and healthy consumer sentiment, management guided for mid single digit growth in the tractor industry, mid to high teens growth in utility vehicles and high single digit growth in the LCV industry for FY27.

Motilal expects M&M to deliver a revenue, EBITDA and PAT CAGR of about 16%, 13% and 14%, respectively, over FY26-28.

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Nuvama has maintained its Buy rating on M&M with a target price of Rs 3,900, an upside of 19% from current levels. The brokerage expects the auto business to remain the key growth driver, forecasting a 16% CAGR in auto segment revenue over FY26-28E, supported by healthy demand for existing models and a robust product pipeline. It highlighted the strong customer response to the recently launched XUV 7XO and XEV 9S, while noting that M&M plans to introduce 10 ICE models comprising one refresh and nine new launches, along with six EVs by 2031.

The Vision Series models across multiple powertrains are scheduled to launch from CY27 onwards. Nuvama also views the transfer of the Mahindra Trucks & Buses division to subsidiary SML Mahindra as a medium-term positive, citing benefits from greater scale, faster product development and operating synergies.

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While the brokerage expects farm revenue growth to moderate to a 4% CAGR over FY26–28E, following a strong 25% growth in FY26, it believes battery electric vehicles (BEVs) will drive future growth. It expects BEV volumes to reach 90,000 units in FY27E and 122,000 units in FY28E, accounting for 12% and 14% of domestic UV volumes, respectively, and helping the company meet the upcoming CAFE 3 norms.

M&M Q1 management commentary

Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, said both the auto and tractor businesses remained resilient during the quarter. He added that the company recorded a 50 basis point sequential increase in SUV revenue market share and a 150 basis point sequential increase in volume market share in the light commercial vehicle segment below 3.5 tonnes.

The farm equipment business also delivered a strong performance during the quarter, driven by higher tractor volumes and market share gains. Tractor volumes rose 18% YoY to 1.58 lakh units, while M&M retained its leadership in the tractor market with a 44.9% market share.