M&M - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | M&M | Market Cap | 3,99,528 Cr. | Current Price | 3,214 ₹ | High / Low | 3,840 ₹ |
| Stock P/E | 26.0 | Book Value | 535 ₹ | Dividend Yield | 0.79 % | ROCE | 27.0 % |
| ROE | 20.8 % | Face Value | 5.00 ₹ | DMA 50 | 3,408 ₹ | DMA 200 | 3,389 ₹ |
| Chg in FII Hold | -0.55 % | Chg in DII Hold | 0.44 % | PAT Qtr | 4,288 Cr. | PAT Prev Qtr | 4,559 Cr. |
| RSI | 45.0 | MACD | -113 | Volume | 38,90,241 | Avg Vol 1Wk | 56,86,094 |
| Low price | 2,360 ₹ | High price | 3,840 ₹ | PEG Ratio | 0.76 | Debt to equity | 0.02 |
| 52w Index | 57.7 % | Qtr Profit Var | 41.6 % | EPS | 115 ₹ | Industry PE | 29.0 |
📊 Financial Overview
- Revenue & Profitability: PAT declined slightly from 4,559 Cr. to 4,288 Cr. QoQ, but EPS at 115 ₹ remains strong. Profitability is robust with consistent earnings power.
- Margins & Returns: ROE at 20.8% and ROCE at 27.0% are excellent, reflecting strong capital efficiency.
- Debt & Liquidity: Debt-to-equity ratio of 0.02 indicates negligible leverage, enhancing financial stability.
- Cash Flow: Strong profitability supports reinvestment, dividend payouts, and expansion opportunities.
💹 Valuation Metrics
- P/E Ratio: 26.0 vs Industry PE of 29.0 → Fairly valued.
- P/B Ratio: ~6.0 (Price 3,214 ₹ / Book Value 535 ₹) → Expensive relative to assets.
- PEG Ratio: 0.76 → Attractive, reflecting growth at reasonable valuation.
- Intrinsic Value: Current price is close to fair value, supported by strong fundamentals.
🏢 Business Model & Competitive Advantage
Mahindra & Mahindra is a diversified conglomerate with leadership in automotive, farm equipment, and financial services. Its strong brand, wide distribution, and innovation in EVs and tractors provide a competitive edge. Diversification across industries reduces risk and enhances resilience.
📈 Entry Zone & Long-Term Guidance
Technically, RSI at 45.0 and negative MACD suggest mild weakness. A good entry zone would be 3,050–3,150 ₹ (near support levels). Long-term holding is advisable given strong fundamentals, diversified business model, and growth prospects in EVs and agriculture.
✅ Positive
- Strong ROE (20.8%) and ROCE (27.0%).
- Debt-free balance sheet (D/E 0.02).
- Fair valuation compared to industry PE.
- DII holdings increased (+0.44%), showing domestic confidence.
⚠️ Limitation
- P/B ratio (~6.0) indicates expensive valuation relative to assets.
- FII holdings decreased (-0.55%), showing reduced foreign confidence.
- Quarterly PAT declined slightly QoQ.
📉 Company Negative News
- Minor decline in quarterly PAT (4,288 Cr. vs 4,559 Cr.).
- FII reduced holdings, signaling cautious sentiment.
📈 Company Positive News
- EPS at 115 ₹ reflects strong profitability.
- DII accumulation (+0.44%) signals domestic support.
🏭 Industry
The automotive and farm equipment industry benefits from rising rural demand, infrastructure growth, and EV adoption. Industry PE at 29.0 highlights M&M’s fair valuation relative to peers. Diversification across sectors provides resilience against cyclical risks.
🔎 Conclusion
M&M is fundamentally strong with excellent return ratios, low debt, and fair valuation. Despite minor profit decline and reduced foreign sentiment, its diversified business model and growth prospects make it a solid long-term investment. Accumulation near 3,050–3,150 ₹ is recommended for investors seeking steady growth and resilience.