Blue chip stock to buy now for an upside potential of 30%; Do you own it?

A leading Indian automotive and farm equipment manufacturer, renowned for its rugged SUVs and tractors, continues its impressive market performance. The company has achieved a remarkable milestone with its eleventh consecutive quarter of double-digit EBITDA growth while showing improved EBIT margins across divisions. Additionally, after an 18-month lull, tractor demand is rebounding strongly.

Share Price Movement 

The share price of Mahindra & Mahindra Limited went down 0.45 percent to Rs. 3,121.15 per share on Tuesday, a decline from its previous close of Rs. 3,137.25 per share. The market capitalisation now stands at approximately Rs. 3,88,801 crore as of February 11, 2025.

Financial Highlights

In Q3FY25, revenue stood at Rs. 41,470 crore, reflecting a 17.5% YoY growth from Rs. 35,299 crore in Q3FY24 and a 9.4% QoQ increase from Rs. 37,924 crore in Q2FY25. Net profit rose to Rs. 3,624 crore, marking a 21.7% YoY rise from Rs. 2,977 crore in Q3FY24 and a 7.8% QoQ increase from Rs. 3,361 crore in Q2FY25.

Target By Jefferies

Jefferies maintains a Buy rating on Mahindra & Mahindra (M&M) with a target price of Rs 4,075, representing a 29.9% upside potential. The brokerage’s bullish stance is underpinned by M&M’s consistent performance, delivering eleven straight quarters of double-digit EBITDA growth. The company’s operational excellence is evident in improved EBIT margins across both farm and auto segments, up 1.4-2.6% year-over-year. 

Jefferies is particularly optimistic about the recovering tractor demand, projected at 15%+ growth in Q4, while M&M’s expanding SUV portfolio continues to drive volume growth. The company’s sustained market share gains across passenger vehicles, tractors, and light commercial vehicles further strengthen the investment case.

Also read: Penny stock jumps 13% after reporting 260% YoY increase in net profit

Competitors 

The top five listed competitors of Mahindra & Mahindra are Tata Motors, Maruti Suzuki, Hyundai Motor Company, Bajaj Auto Ltd, and Ashok Leyland Ltd. These companies compete across various segments, including passenger vehicles, commercial vehicles, and two-wheelers.

Mahindra & Mahindra is currently trading at a P/E of 32.70, which is above the industry P/E of 27.86.

Market Outlook

India’s automobile industry is poised for significant growth, driven by rising middle-class income and a youthful population. With EV adoption accelerating, the sector is expected to see a fivefold increase in market size by 2028. Government initiatives like the PM E-DRIVE scheme and FAME extension support this transition, while shared mobility and autonomous vehicles present new opportunities. Foreign investments continue to rise, positioning India as a global EV hub. By 2030, 30% of new vehicle sales are projected to be electric.

Written By Fazal Ul Vahab C H

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