Mahindra & Mahindra Share Price Target at Rs 4,387: BOB Capital Markets
BOB Capital Markets has retained its BUY rating on Mahindra & Mahindra but trimmed its target price to Rs 4,387 from Rs 4,530, still implying about 40% upside from the Rs 3,128 market price. Standalone September-quarter revenue rose 27.1% year on year to Rs 42,477 crore as automotive volumes climbed about 26% on strong SUV and light commercial vehicle demand. Tractors were the weak spot: volumes fell about 6%, and farm margins shrank about 300 basis points as steel, copper and rubber costs surged. Adjusted profit slipped 10.9% to Rs 4,076 crore, prompting the brokerage to cut FY27 EBITDA estimates by about 16%.
Q2FY27 Result Review · BOB Capital Markets · Automobiles
Mahindra & Mahindra: SUVs Climb, Tractors Stall; BOB Capital Markets Keeps BUY With Rs 4,387 Target
The automotive engine is running ahead of the factories that feed it. The farm business, hit by a weak monsoon and costlier metals, is the uphill stretch that forced an earnings cut.
BUY · Retained
CMP Rs 3,128
Target Rs 4,387 (from Rs 4,530)
Upside 40%
Summit
Rs 4,387
Quarter at a Glance: Which Way the Needle Points
Revenue
Rs 42,477 cr
+27.1% YoY
Volume
4.42 lakh units
+15.6% YoY
EBITDA
Rs 4,949 cr
+1.8% YoY
EBITDA margin
11.7%
-289 bps YoY
Adjusted PAT
Rs 4,076 cr
-10.9% YoY
Mahindra & Mahindra's standalone business delivered a quarter of two speeds. Revenue grew 27.1% to Rs 42,477 crore on blended volume growth of 15.6% and a 10% rise in average realisation to about Rs 9.60 lakh per vehicle. Raw material costs, however, rose 33.1%, pulling gross margin down to 20.8% from 24.4%.
EBITDA of Rs 4,949 crore actually beat BOB Capital Markets' estimate by 12.6%, but lower other income, down 23.5% to Rs 1,805 crore, and a tax rate of 27.4% against 25.3% a year earlier dragged adjusted profit 10.9% lower to Rs 4,076 crore, about 3.9% below the brokerage's forecast.
Expedition log: standalone Q2FY27 (Rs crore)
| Metric | Q2FY27 | Q2FY26 | YoY | Q1FY27 | vs BOB est. |
|---|---|---|---|---|---|
| Net revenue | 42,477 | 33,422 | +27.1% | 41,920 | +2.0% |
| EBITDA | 4,949 | 4,862 | +1.8% | 5,111 | +12.6% |
| EBITDA margin | 11.7% | 14.5% | -289 bps | 12.2% | +110 bps |
| Other income | 1,805 | 2,360 | -23.5% | 815 | -19.4% |
| Adjusted PAT | 4,076 | 4,573 | -10.9% | 3,685 | -3.9% |
| EPS (Rs) | 32.5 | 36.4 | -10.6% | 29.7 | -4.8% |
Two Terrains: Highway Autos, Muddy Farm Track
Headwind gauge: input costs YoY vs price hikes taken
+42%
+40%
+17%
~5%
~4%
Bars drawn to one scale. Farm margins suffer more because, management said, steel and rubber exposure there is largely unhedged.
The Capacity Climb: From 64,500 to 1,32,000 Units a Month
64.5k
~73k
82k
92k
132k
Trailhead
earlier base
October output
vs 69k rated
Camp 1
end-FY27
Camp 2
FY28
Summit
FY31, Nagpur
Demand is outrunning supply. Plants produced about 73,000 units in October against rated capacity of 69,000, dealer inventory is very lean, and management is lifting operational capacity about 27% to 82,000 units a month by end-FY27. A new Nagpur plant, on 1,500 to 2,000 acres including a supplier park, takes the trajectory to 1,32,000 units a month by FY31.
Five major launches are lined up by June 2027, including the first all-new product on the NU_IQ platform (about 10,000 units a month), a new INGLO-based model, one major refresh and a new light commercial vehicle. The XUV 3XO with a CNG powertrain and no loss of boot space launched during the quarter.
Range estimator: the electric leg
EVs made up 12% to 12.7% of SUV volumes; cumulative EV sales have crossed 1 lakh units.
EBITDA margin about 9%, positive even without subsidies; PLI booked in the quarter was about Rs 1,000 crore.
Capacity rises to 12,000 a month from 8,000 by February-March. The XEV 9S remains the top-selling EV model.
Electric three-wheeler penetration hit about 50% over the last five months.
Support Vehicles: The Group Companies
Mahindra Finance
Profit up 61% YoY on lower credit costs; AUM above Rs 1.3 lakh crore.
Tech Mahindra
Net profit grew 33% YoY.
Growth Gems
Profits tripled, led by a record quarter at Mahindra Logistics.
Lifespaces & Aerospace
Realty targets Rs 10,000 crore pre-sales by FY30; aerospace won an Airbus A320neo tail-section package.
Recalculating the Route: Estimate Cuts
BOB Capital Markets cut FY27, FY28 and FY29 EBITDA estimates by 15.6%, 7.5% and 2.5% to reflect commodity inflation, the weak farm cycle and what it calls a "gloomy" H2FY27 and Q1FY28. It expects farm weakness to spill into the first half of FY28 given depleting reservoir levels. It still projects FY26-29 compound growth of about 11% in revenue and 13% in EBITDA and profit, with volumes rising 8.7% in FY27 to 17.84 lakh units.
| Rs crore | FY27E new | FY27E old | FY28E new | FY28E old | FY29E new |
|---|---|---|---|---|---|
| Revenue | 1,54,032 | 1,56,128 | 1,75,481 | 1,78,691 | 2,00,665 |
| EBITDA | 19,226 | 22,786 | 24,280 | 26,242 | 29,528 |
| Adjusted PAT | 14,943 | 17,755 | 18,607 | 20,157 | 22,419 |
| EPS (Rs) | 124.7 | 148.2 | 155.3 | 168.2 | 187.1 |
| P/E at Rs 3,128 | 25.1x | – | 20.1x | – | 16.7x |
Valuation and What Investors Should Do
Target
Rs 4,387
Subsidiaries
Rs 364
30% holdco discount
Core business
Rs 4,024
24x Sep-2028 forward EPS
Sum-of-the-parts cairn, Rs per share
The brokerage continues to value the core business at 24 times September 2028 earnings, a premium to the long-term average of 22 times, and adds Rs 364 a share for listed subsidiaries. That yields the revised sum-of-the-parts target of Rs 4,387, down from Rs 4,530.
For investors, the call is to stay with the leader through the rough patch. BOB Capital Markets argues the automotive arm can absorb cost inflation better than the farm business through premiumisation and EVs, while near-zero debt keeps return ratios healthy despite heavy capex. Its FY27 EPS forecast of Rs 124.7 now sits below the Rs 136.1 consensus, so the Street may still have downgrades to digest.
The stock trades at Rs 3,128, about 19% below its 52-week high of Rs 3,840 and 14% above the low of Rs 2,744. Promoters hold 19%, foreign portfolio investors 37% and domestic institutions 29%; market value is roughly Rs 3.76 lakh crore by TopNews' estimate.
Trail Hazards to Watch
Printed risk
Commodity inflation lasting longer than expected.
Printed risk
Faster launches by rivals in the high-end SUV segment.
Printed risk
A slower farm recovery than management guides for.
TopNews watch
BOB models FY27 operating cash flow of about -Rs 177 crore, with cash falling to about Rs 2,815 crore from Rs 15,910 crore.
Editor's Note: inconsistencies in the source report
1. EPS in the assumptions table. The "key assumptions" table lists FY27-29 EPS of Rs 148.2, Rs 168.2 and Rs 192.2, which match the old estimates. The revised figures elsewhere in the report are Rs 124.7, Rs 155.3 and Rs 187.1; we use the revised set.
2. EV penetration. The summary puts EVs at about 13% of SUV sales; the earnings-call table says 12% to 12.7%. We quote the call figure.
3. Festive timing. The call notes describe the festive season shifting into Q3, while the valuation section refers to a shift "from Q4 to Q1FY28."
4. Small arithmetic gaps. 24 times is described as a 10% premium to the 22-times average; the arithmetic gives about 9%. Core value of Rs 4,024 plus subsidiaries of Rs 364 adds to Rs 4,388, not Rs 4,387. FY26 return on equity appears as both 23.2% and 23.0%.
Sources
BOB Capital Markets Equity Research, Mahindra & Mahindra Q2FY27 Result Review, Nov. 6, 2026; analysts Milind Raginwar and Ayush Dugar. Company data and management commentary as cited in the report; prices as of Nov. 5, 2026, from NSE. Figures converted to crore and lakh from the report's units by TopNews; market value estimated by TopNews from the report's share count.
Disclaimer: This TopNews Stock Report is based on a brokerage research report and is for information only. It is not investment advice. Stock market investments are subject to market risks; consult a registered financial adviser before making investment decisions.
