M&M - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.6

Mahindra & Mahindra (M&M) is a fundamentally strong company with excellent return metrics, low debt, and a diversified business model. Its valuation is fair, and it remains a solid long-term investment.

📊 Financial Overview

• Revenue: ₹1,67,522 Cr (TTM) — strong growth across auto and farm segments

  Value Research

• Profitability: PAT rose to ₹3,564 Cr from ₹2,954 Cr — quarterly growth of 20.6%

  The Mahindra Group

• Margins: ROCE at 27.0% and ROE at 20.8% — excellent capital efficiency

  Value Research

• Debt Profile: Debt-to-equity ratio of 0.03 — near-zero leverage

  Value Research

• EPS: ₹102 — supports strong earnings base

📈 Valuation Metrics

• P/E Ratio: 32.6 — slightly below industry average of 35.0

  Value Research

• P/B Ratio: ~7.0 — reflects premium valuation relative to book value ₹495
• PEG Ratio: 0.95 — indicates fair valuation relative to growth
• Intrinsic Value: Estimated around ₹3,600–₹3,800 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: Diversified presence in automotive, farm equipment, IT, and financial services

  Business Upturn

• Moat: Market leader in SUVs and tractors with strong brand equity

  The Mahindra Group

• Growth Drivers: EV expansion, global farm equipment sales, and digital transformation

📌 Entry Zone Recommendation

• Suggested Entry: ₹3,400–₹3,475 — near DMA50 and RSI neutral zone
• Technical Indicators: RSI at 45.1 (neutral), MACD positive — bullish momentum

📈 Long-Term Holding Guidance

• Strong fundamentals, diversified business, and low debt make M&M a reliable long-term hold
• Ideal for investors seeking growth with stability and sector leadership

✅ Positive

• Quarterly profit growth of 36.4%
• Excellent ROCE and ROE
• Low debt and strong EPS
• Diversified revenue streams

⚠️ Limitation

• FII holding declined by 0.49%
• P/B ratio suggests premium valuation

📰 Company Negative News

• No major negative news reported recently

🌟 Company Positive News

• Auto volume up 16%, SUV market share rose to 23%

  The Mahindra Group

• Farm volume up 20%, market share increased to 44.2%

  The Mahindra Group

🏭 Industry

• Industry P/E at 35.0 — M&M trades slightly below average

  Value Research

• Auto sector driven by EV adoption, rural demand, and export growth

🧾 Conclusion

• Mahindra & Mahindra is a fundamentally strong, fairly valued stock with excellent growth prospects
• Accumulate on dips for long-term gains; maintain a growth-oriented investment horizon

Sources

The Mahindra Group

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