Shares of Mahindra & Mahindra (M&M) surged over 2% to ₹3,019 in morning trade on September 23, hitting a new all-time high. The rally followed Goldman Sachs’ reaffirmation of its 'buy' rating on the stock, alongside an upgraded price target, which reflects a bullish outlook on the company's growth trajectory. As a leader in India's auto and tractor market, M&M has become a strong contender in the field of share market investment.
Goldman Sachs sees potential for further upside
Goldman Sachs has increased its price target for M&M to ₹3,400, representing a 15% potential upside from the stock's last closing price of ₹2,951 on the National Stock Exchange (NSE). This rise comes as M&M shares have been one of the best performers on the Nifty index, having surged by 71% since the beginning of the year.
The brokerage firm credits M&M's growth to various key factors. Notably, the introduction of more affordable variants of the popular XUV700 is expected to drive profits further. Additionally, the forthcoming Battery Electric Vehicle (BEV) launches are anticipated to be profitable from day one. The company’s Inglo EV platform is also gaining validation, solidifying its position in the electric vehicle market.
For those considering share market investment, M&M’s strong fundamentals make it an attractive option.
Rural recovery and export expansion to drive future growth
Another aspect supporting M&M’s growth is the recovery in rural markets. While still in the early stages, rural demand is showing signs of improvement, particularly in the tractor segment. M&M’s management has projected a stronger outlook for the tractor market as the company moves into the second half of FY25. They expect a 5% year-on-year growth in the tractor business, reaffirming confidence in this segment.
On the export front, M&M has ambitious plans. The recent launch of Thar Roxx test drives in mid-September has seen strong interest, and the company is preparing to expand its exports to new regions, including Australia, South Africa, and Chile. A global pickup truck is also in the works, which is expected to enhance M&M’s international presence. For investors keen on share market investment, M&M’s global expansion offers an additional layer of potential.
Positive outlook for SUVs and tractors
M&M’s SUV business continues to thrive, with the company forecasting mid- to high-teen growth for the segment. This robust growth, combined with the company's commitment to launching profitable electric vehicles, positions M&M as a leader in both the traditional and electric automotive markets.
Investors looking for reliable share market investment opportunities can take note of the company's resilience and future growth potential. By focusing on rural recovery, global expansion, and product innovation, M&M is well-positioned for long-term success.
Wrapping up
As M&M shares hit an all-time high and Goldman Sachs reaffirms its 'buy' rating with an increased price target, the company remains a compelling choice for investors. The company’s focus on profitability through BEVs, rural market recovery, and international expansion provides strong growth levers, making it a solid candidate for share market investment. With a potential 15% upside and a track record of consistent performance, M&M shares present an attractive investment opportunity.
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