M&M shares surge 5% after Q2 results, brokerages maintain bullish outlook

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M&M’s farm EBIT margin stood at 16.8%, declining 176 basis points q-o-q, while its auto EBIT margin came in at 7.7%, improving 58 basis points q-o-q

By Madhu Balaji

Updated - November 06, 2026 at 04:09 PM. | Bengaluru

M&M shares surged 5% after the company reported a 25% y-o- rise in consolidated net profit attributable to owners to ₹4,588 crore for Q2. | Photo Credit: AJAY VERMA

Mahindra & Mahindra (M&M) shares surged 5 per cent after the company reported a 25 per cent year-on-year rise in consolidated net profit attributable to owners to ₹4,588 crore for the second quarter ended September 30, 2026, compared with ₹3,673 crore in the corresponding period last year.

The stock ended 5 per cent higher at ₹3,287.20 on the NSE.

The company’s consolidated net profit growth comes amid mixed performance across its auto and farm segments. M&M’s farm EBIT margin stood at 16.8 per cent, declining 176 basis points q-o-q, while its auto EBIT margin came in at 7.7 per cent, improving 58 basis points q-o-q.

CLSA maintained its high-conviction outperform rating on M&M with a target price of ₹4,650. The brokerage said farm EBIT margin came in at 16.8 per cent, while auto EBIT margin stood at 7.7 per cent, largely in line with expectations.

CLSA retained M&M as its top auto pick, citing sustained UV market share gains driven by strong execution and upcoming launches, traction in battery electric vehicles (BEVs), ongoing capacity expansion and attractive valuations.

The brokerage noted that M&M is trading at 15 times FY28CL EPS, compared with its 10-year average price-to-earnings multiple of 17 times. It added that the farm segment contributes 30 per cent of FY28CL EBIT, meaning a 5 per cent swing in tractor volumes would have less than a 2 per cent impact on the sum-of-the-parts valuation. CLSA believes concerns over tractor volume growth have led to an overdone weakness in sentiment.

Citi maintained its buy rating with a target price of ₹4,330, noting that the second-quarter performance was ahead of expectations, driven by better-than-estimated EBITDA margins.

The brokerage said management’s outlook on utility vehicles (UVs) remains positive, with volume growth expected to be supported by capacity expansion and new launches. It also noted an improving demand outlook for light commercial vehicles (LCVs).

However, Citi highlighted that M&M lowered its FY27 tractor volume growth guidance to flat year-on-year trends from an earlier expectation of 5 per cent growth, citing weak monsoons and low reservoir levels, particularly in Maharashtra and Karnataka. The brokerage said it had modestly increased earnings estimates while factoring in input-cost pressures and a weaker tractor outlook.

Bernstein maintained its outperform rating on M&M with a target price of ₹4,100. The brokerage said the company’s next phase of growth would have to come with less support from the tractor cycle.

It highlighted that weaker rainfall, declining reservoir levels and pressure on farm incomes had prompted management to cut its FY27 tractor industry outlook to flattish.

Bernstein noted that M&M’s wider earnings base proved valuable during the quarter. Standalone EBIT, excluding other income, grew 2 per cent year-on-year, while consolidated EBIT, excluding other income, increased 19 per cent. The brokerage said contributions from businesses beyond the standalone auto and farm franchises were helping the group sustain growth as its core businesses navigated a tougher environment.

Published on November 6, 2026

Companies to follow

• Mahindra & Mahindra Ltd

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