M&M Share Price: Shares of Mahindra & Mahindra (M&M) continued their strong upward trajectory, hitting a new high of ₹3,098, gaining 2% during Tuesday’s intra-day trade on the Bombay Stock Exchange (BSE). This marks an 11% rally in just three days, following reports that Skoda Auto Volkswagen India is considering selling up to 50% of its stake to M&M.
Ongoing Discussions with Volkswagen Group
On Monday, September 24, M&M clarified in an exchange filing that it continues to explore collaboration opportunities with Volkswagen Group. The two companies have been in discussions to expand their partnership, and any concrete outcomes from these talks will be disclosed per regulatory requirements.
M&M’s stock performance has been outstanding over the past 10 months, doubling from ₹1,552.70 to reach its current levels. This significant rally has also pushed the company’s market capitalization towards the ₹4-trillion mark, with its market cap hitting ₹3.85 trillion in today’s intra-day trade.
Background on the M&M-Volkswagen Partnership
M&M’s collaboration with Volkswagen Group dates back to February 16, 2024, when both companies signed a supply agreement for components related to Volkswagen’s MEB platform. This partnership aims to support M&M’s INGLO electric vehicle platform, with Volkswagen providing key electric components. The agreement marks a deepening of their e-mobility collaboration, which started with a 2022 partnership deal. Both companies are also exploring further expansion of this joint venture.
M&M’s Diversified Business Profile
M&M’s diverse portfolio includes businesses ranging from farm equipment to automobiles, defence, IT, financial services, renewable energy, logistics, and real estate. However, its farm equipment and auto divisions remain its most significant revenue drivers.
The demand drivers for these two segments differ, with auto demand driven by factors like GDP growth, industrial production, and interest rates, while farm equipment demand depends on rainfall, labour costs, and interest subvention schemes. This diversification within M&M helps the company balance cycles across these two sectors.
Future Plans: SUV and EV Expansion
M&M has aggressive plans for the future, including the launch of nine new internal combustion engine (ICE) SUVs (including three refreshes) and seven electric vehicles (EVs) by FY30. The company’s robust order book, combined with product refreshes and an increasing production capacity, is expected to support its growth in the auto segment.
Analyst Ratings and Market Outlook
Analysts at ICICI Securities have maintained a ‘Buy’ rating on M&M with a target price of ₹3,349 per share. The outlook for the second half of FY25 (October to March) is positive, with expectations of better growth driven by a favourable monsoon and improved auto segment performance.
Exports for M&M have also been strong, with a 45% year-on-year increase in Q1FY25 to 4,500 units, despite muted growth in some end markets. Analysts expect the domestic tractor industry to grow by 6% in FY25 and 15% in FY26, providing further momentum for M&M’s stock performance.
