On Monday, Mahindra & Mahindra Ltd (MM:IN) (OTC: MAHMF) received a positive outlook from Investec, as the firm increased the price target on the shares to INR3,100 from INR2,550, while reiterating a Buy rating. The adjustment follows the company's first Group Investor Day, where management presented their growth strategies for the group.
The automaker's strategy focuses on enhancing market share in the automotive sector by concentrating on technology, safety, and premiumisation. Mahindra & Mahindra aims to expand SUV capacity by 50% by the fiscal year 2026 and has plans for 23 product launches across powertrains by 2030. These ambitious goals are part of the company's efforts to solidify its position in the market.
Investec's confidence in Mahindra & Mahindra's electric vehicle (EV) preparedness was bolstered after previewing the company's production-ready EVs, which are anticipated to launch in the calendar year 2025.
The firm noted that Mahindra's strong supply chain partnerships with industry leaders such as Volkswagen (ETR:VOWG_p), BYD (SZ:002594), and Valeo (EPA:VLOF), combined with the development of its own INGLO platform and the inclusion of Advanced Driver Assistance Systems (ADAS) features, provide the company with a competitive edge in the evolving EV landscape.
The firm also highlighted that Mahindra's management expressed confidence in the potential expansion of the Auto Business EBIT (Earnings Before Interest and Taxes) margin. This expected growth is to be driven by operational leverage, cost control, product mix, and pricing strategies.
Investec's revised price target reflects an optimistic view of Mahindra & Mahindra's strategic direction and potential for growth in the automotive and EV sectors. The company's comprehensive approach to expanding its product line and enhancing its technological capabilities has garnered analyst support for its stock performance.
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