Shares of Mahindra & Mahindra (M&M) rose about 3% on May 31 after Bank of America Securities upgraded the stock to ‘buy’ and set a new target price of Rs 3,050, suggesting a 22% potential increase.
At 12:38 pm, M&M shares were trading at Rs 2,513.65 on the NSE.
BofA Securities highlighted several growth drivers for M&M expected to unfold in the next 12-18 months. They are optimistic about the company’s strong performance in the SUV market and a possible rebound in the tractor business. By the end of FY24, M&M’s market share in SUVs rose to 20.4%, light commercial vehicles to 49%, and tractors to 41.6%.
BofA also pointed out that M&M’s subsidiaries are set to significantly boost the company’s future performance. They praised M&M’s strong management, ambitious growth strategies, and focus on sustainability.
The brokerage is comfortable with M&M’s current price-to-earnings ratio of 19x, considering it favorable. They expect M&M’s earnings per share to grow at an 18% CAGR, aiming for a 20% return on equity.
Most analysts share this positive outlook, with 35 out of 40 brokerages rating the stock as a ‘buy’. M&M has been the best-performing stock in the Nifty 50 in 2024, delivering returns of around 48%.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
