M&M - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | M&M | Market Cap | 4,18,249 Cr. | Current Price | 3,364 ₹ | High / Low | 3,840 ₹ |
| Stock P/E | 29.9 | Book Value | 535 ₹ | Dividend Yield | 0.75 % | ROCE | 27.0 % |
| ROE | 20.8 % | Face Value | 5.00 ₹ | DMA 50 | 3,598 ₹ | DMA 200 | 3,392 ₹ |
| Chg in FII Hold | -0.55 % | Chg in DII Hold | 0.44 % | PAT Qtr | 4,521 Cr. | PAT Prev Qtr | 3,564 Cr. |
| RSI | 30.9 | MACD | -72.5 | Volume | 17,08,862 | Avg Vol 1Wk | 52,41,414 |
| Low price | 2,360 ₹ | High price | 3,840 ₹ | PEG Ratio | 0.87 | Debt to equity | 0.02 |
| 52w Index | 67.8 % | Qtr Profit Var | 17.7 % | EPS | 108 ₹ | Industry PE | 30.8 |
📊 Financials: Mahindra & Mahindra (M&M) has a market cap of 4,18,249 Cr. with quarterly PAT at 4,521 Cr., up from 3,564 Cr. (17.7% growth). ROE at 20.8% and ROCE at 27.0% reflect strong efficiency and profitability. Debt-to-equity ratio of 0.02 indicates an almost debt-free balance sheet. EPS stands at 108 ₹, supported by consistent earnings. Cash flows remain robust given diversified operations across automotive, farm equipment, and financial services.
💹 Valuation: Current P/E of 29.9 is close to the industry average of 30.8, suggesting fair valuation. P/B ratio is ~6.29 (3,364 ₹ / 535 ₹), which is expensive relative to book value. PEG ratio of 0.87 indicates earnings growth is reasonably priced. Intrinsic value appears aligned with current levels, making the stock attractive for long-term investors.
🏭 Business Model & Competitive Advantage: M&M operates in automotive, farm equipment, IT services, and financial services. Its competitive advantage lies in strong brand equity, leadership in tractors, and diversified business segments. The company benefits from scale, rural presence, and innovation in EVs, though profitability is sensitive to cyclical demand and global economic conditions.
📈 Entry Zone: With RSI at 30.9 (near oversold) and support around 3,200–3,300 ₹, accumulation in this zone is favorable. Current price at 3,364 ₹ offers a reasonable entry for long-term investors, especially given strong fundamentals.
🕰️ Long-Term Holding Guidance: M&M is fundamentally strong, fairly valued, and has growth potential in EVs and farm equipment. Long-term holding is recommended given its strong return metrics, low debt, and diversified business model.
Positive
- Strong ROE (20.8%) and ROCE (27.0%).
- Debt-to-equity ratio at 0.02 shows near debt-free status.
- Quarterly PAT growth of 17.7%.
- DII holdings increased by 0.44%, showing domestic investor confidence.
Limitation
- P/B ratio (~6.29) is expensive relative to book value.
- FII holdings decreased by 0.55%, showing reduced foreign confidence.
- Stock trading below DMA 50 and DMA 200, indicating weak momentum.
Company Negative News
- Weak technical momentum with RSI near oversold levels.
- Reduced foreign institutional investor confidence.
Company Positive News
- Quarterly PAT improved significantly (4,521 Cr. vs 3,564 Cr.).
- Strong presence in farm equipment and automotive sectors.
- EV initiatives provide long-term growth opportunities.
Industry
- Automotive and farm equipment sector benefits from rural demand and EV adoption.
- Industry P/E at 30.8 highlights M&M’s fair valuation relative to peers.
Conclusion
⚖️ M&M is a fundamentally strong, diversified company with robust return metrics and low debt. Entry around 3,200–3,300 ₹ is favorable, and long-term holding is recommended given its strong fundamentals, EV growth potential, and leadership in farm equipment.