Brokerages maintained their bullish stance on Mahindra and Mahindra after the company posted an uptick in margin and business outlook in its June quarter results. M&M‘s shares were in the red on Thursday morning.

What Happened: M&M reported a 5.31% year-on-year fall in net profit to ₹2,612.63 crore in the June quarter. Its revenue was up 12% to ₹27,038.79 crore. EBITDA rose 22% to ₹4,023 crore while EBITDA margin gained 120 basis point to 14.9%. The net profit and sales missed estimates while EBITDA exceeded expectations. 

The company clawed back the leadership in sports utility vehicle (SUV) revenue market share at 21.6% and top position in the tractor market with a share of 44.7%.

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Brokerage Views: Nuvama maintained "buy" and hiked the target price to ₹3,800. The brokerage estimates a revenue and earning compound annual growth rate of 17% and 20% over FY24-27.

The research firm sees a recovery in the farm segment due to abundant monsoons, favourable government policies and better trade terms for farmers. The automotive segment has robust revenue visibility on the back of a 1.78 lakh utility-vehicle order book and a healthy FY25 launch pipeline, which includes five-door Thar and dedicated platform electric vehicles, the brokerage added. 

JP Morgan also maintained an "overweight" stance and increased the target price to ₹3,210. The firm said there is a healthy operating outlook for both farm and auto businesses. The research firm increased its auto and farm margins but reduced average selling prices considerably. 

BofA also retained a "buy" call and raised the target price to ₹3,400. The brokerage said there was a margin surprise in Q1 but demand softness in SUV weighted in. The research firm is positive on the firm’s farm business outlook. It sees M&M as a compounder with strong execution on share gains and margin delivery. 

Price Action: Shares of M&M were down 0.78% to ₹2,885.15 on Thursday morning.

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