Mahindra & Mahindra (M&M) announced its Q1FY27 results today. The company’s standalone EBITDA grew 5% year‑on‑year to ₹51.1 bn, falling short of the ₹55.8 bn estimate that analysts had expected. The gap was mainly due to lower automotive margins.
Automotive margins were weaker than forecast because the company did not gain market share in the passenger vehicle (PV) segment. In addition, the tractor business saw a decline in demand, which also weighed on earnings.
Looking ahead, M&M’s volume growth is expected to slow in FY27/28. Analysts predict a mid‑single digit increase, reflecting the lack of PV market‑share gains and the tractor industry’s slide.
The company’s growth is likely to follow the overall PV market. Demand is shifting toward small cars because of lower GST and an adverse product mix. However, there are no major new launches, only mid‑cycle updates, while competitors are introducing more models.
Revenue and profit after tax (PAT) are projected to grow at 11% and 8% compound annual growth rates (CAGR) respectively from FY26 to FY28.
Anand Rathi maintains a HOLD rating on M&M shares. The revised target price is ₹3,675, down from ₹4,050, based on a 22‑times earnings multiple for the March‑28 period and ₹725 for investments.