Mahindra & Mahindra Shares Rise on Strong SUV Sales
Mahindra & Mahindra, the Indian automaker, experienced a surge in its share value following a significant increase in sales of its sport utility vehicles (SUVs) in the latest quarter. The company’s shares rose by 5.5% to reach 1,749.00 Indian rupees ($21.06), marking their largest one-day percentage gain since May 2021.
Notably, Mahindra & Mahindra disclosed that its revenue for the quarter ended December rose by 15% compared to the same period the previous year. This boost came as a result of achieving the highest-ever sales volume for its auto segment during the period. However, the positive performance in the auto sector was offset by lower tractor sales, which form the company’s second-largest segment.
Analysts from Jefferies, Nitij Mangal, and Sagar Sahu, commended the overall results, highlighting that the Ebitda (earnings before interest, taxes, depreciation, and amortization) surpassed their expectations. They did, however, express concern regarding the slowdown in tractor sales, describing it as intensifying after an elongated upcycle. Jefferies maintained a hold rating on the company’s stock while raising the target price to INR1,615 from INR1,580.
In line with expectations, analysts from Nomura, Kapil Singh, and Siddhartha Bera, affirmed a buy rating for Mahindra & Mahindra shares. They raised the target price to INR2,143 from INR1,980 and emphasized that the company’s forecasted growth would outpace the industry for the next five to six months, providing promising visibility.
Mahindra & Mahindra’s strong performance in the SUV market and positive revenue growth are indicative of its ability to adapt and thrive amidst a challenging automotive landscape. The company’s success in the auto segment, despite the setbacks faced in the tractor segment, has garnered the attention of investors and analysts alike.
As Mahindra & Mahindra continues to navigate market dynamics and capitalize on its SUV sales, industry stakeholders will closely monitor its performance as a significant player in the Indian automotive sector. With the company demonstrating resilience and sustained growth, it stands ready to capitalize on future opportunities and cement its position within the industry.
Please address questions or comments to Amanda Lee at amanda.lee@wsj.com.
