Mahindra & Mahindra (M&M) continues to witness a significant rise in its share market investment, with the stock reaching a new high of ₹3,098 during Tuesday’s intra-day trading on the Bombay Stock Exchange (BSE). The 2% gain is part of an 11% surge over three days, driven by reports that Skoda Auto Volkswagen India is considering selling up to 50% of its stake to M&M.
Speculations on stake sales push the stock higher
The recent rally in M&M’s stock price is largely attributed to speculation around the possible stake acquisition from Skoda Auto Volkswagen India. While no concrete decisions have been made, M&M confirmed in a regulatory filing on 24 September that discussions are ongoing. The company assured investors that any official developments would be disclosed as per market regulations.
M&M's share market growth over time
Over the last 10 months, M&M’s stock price has doubled, rising from ₹1,552.70 to its current high. This rapid increase has brought the company’s market capitalisation (market cap) close to the ₹ 4 trillion milestone, with a current cap of ₹3.85 trillion. This impressive growth makes M&M an attractive option for share market investment.
Deepening collaboration with Volkswagen
In February 2024, M&M and Volkswagen Group solidified their partnership by signing a supply agreement for electric vehicle (EV) components. This agreement will support M&M’s electric platform, INGLO, and enhance the company's presence in the electric mobility space. The collaboration, which began in 2022, marks a strategic move for both companies in the expanding EV market.
Diversified business strategy supports resilience
M&M’s diversified business model spans sectors such as farm equipment, automobiles, defence, IT, financial services, and real estate. The company’s key revenue drivers are its auto and farm equipment divisions. According to India Ratings and Research (Ind-Ra), M&M’s varied product range helps it cater to a broad customer base and enables it to navigate different demand cycles across sectors.
Future growth prospects and analyst recommendations
M&M plans to launch nine internal combustion engine SUVs and seven EVs by FY30, supported by a strong order book and refreshed product strategy. Analysts at ICICI Securities have given M&M a ‘Buy’ rating, with a target price of ₹3,349 per share. They project steady growth in the company’s share market investment, particularly with exports up 45% year-on-year in Q1 and domestic tractor volume growth expected to rise by 6% in FY25.
Key takeaways
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