Analysts are consensus on the fact that Mahindra & Mahindra Ltd. will likely face challenges because of rising commodity prices. They retained stock rating and target prices except Citi Research after the company posted decent numbers for April–June.
Mahindra & Mahindra reported first-quarter revenue, Ebitda, and net profit a tad lower than Morgan Stanley’s estimates while it missed Citi Research’s estimates. Its Ebitda margin of 14.3% was 70 basis points lower than Morgan Stanley estimates.
A strong mix and leverage of its existing network supported Mahindra & Mahindra Ltd.’s margin, according to Morgan Stanley. This margins will soften in coming quarters.
The company reported depreciation of Rs 1,000 crore which is lower than Morgan Stanley’s estimate of Rs 1,400 crore, the brokerage said in a note.
Mahindra & Mahindra Q1FY26 Highlights (Standalone, YoY)
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Revenue up 25.8% to Rs 34,142.96 crore versus Rs 27,132.76 crore.
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Net Profit up 32% to Rs 3,449.84 crore versus Rs 2,612.63 crore.
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Ebitda up 17% to Rs 4,795.44 crore versus Rs 4,116.19 crore.
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Margin at 14.0% versus 15.2%.
Demand outlook appears positive especially for the rural sector, Citi Research said. Management is optimistic that demand will likely recover in urban areas as well.
Mahindra & Mahindra’s model pipeline remained strong. It is set to launch a new UV platform on Aug 15 and two more BEV models on January 2026, Citi Research said.
However, concerns are rising about commodity prices particularly in steel and precious metals. The Citi Research cut Mahindra & Mahindra’s margin estimates by 30–70 basis points for financial year 2026 and 2028, the brokerage said. It has also cut the target price to Rs 3,700 from 3,810 apiece. The current target price implied a 14.7% upside from Wednesday’s close.
As per management, the company is well-covered for rare-earth materials till the end of financial year 2026. It has been taking actions to control inventory and find substitutions, brokerages said.
Mahindra & Mahindra is eligible to get incentives under PLI scheme for its XEV, and the company will start accruing the incentives from second quarter, Morgan Stanley said.
The brokerage maintained an ‘Overweight’ rating with a target price of Rs 3,668 apiece, which implied 13.7% upside from Wednesday’s close price.
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