Shares of auto major Mahindra & Mahindra on Monday surged as much as 5.3% to hit an intraday high of ₹1,350 apiece on the BSE after the company reported an increase in its net profit by 22% year-on-year (YoY) to ₹1,548.97 crore in the March quarter, led by automobile and farm equipment segments.

On Monday, the scrip opened at ₹1,312.05 higher than the closing price of the previous session at ₹1,281.85 on the BSE. At 1:11 pm, the share price of Mahindra & Mahindra was trading 3.33% higher at ₹1,325.60. At the current price, shares of the auto major are trading 5.04% lower than the 52-week high of ₹1,396, which the company touched on February 26. The share price of Mahindra & Mahindra is trading 43.6% higher than the 52-week low of ₹922.65, which the company touched on May 27 last year. During the session on Monday, the market capitalisation of Mahindra & Mahindra stood at ₹1.64 lakh crore with more than 1.82 lakh shares exchanging hands, against the two-week average of 0.82 lakh shares.

In the January to March quarter, the company's revenue from operations surged as much as 30.9% to ₹22,571.37 crore from ₹17,237.76 crore in the same period last year. In FY23, the company's revenue from operations surged by 47% YoY to ₹84,960 crore, whereas its profit surged by 35.2% YoY to ₹6,548.64 crore.

During the quarter under review, the automobile segment’s revenue surged 35% to ₹16,400 crore as against ₹12,185 crore in the same period last year. The segment’s profit before tax stood at ₹1,190 crore, up 82% YoY as against ₹653 in the same period. In FY23, the automobile segment's standalone revenue was up 63% YoY at ₹58,511 crore, whereas the profit before tax stood at ₹3,750 crore, up 194% YoY.

The company continued to retain the top position in the SUV segment for the 5th consecutive quarter, with a market share of 19.6%. The volumes during the quarter under review stood at 99,112 units. In FY23, the company’s total SUV volume stood at 69,85,000 units, with a 19.1 % market share.

Most of brokerage firms have given a 'BUY' rating to Mahindra & Mahindra stock, with a revised target price. Analysts at ICICI Securities have given a 'BUY rating for Mahindra & Mahindra with a revised target price of ₹1,478. "With SUVs scaling up and Scorpio–N promotional pricing moving out, we believe M&M is on course to touch record auto segment margin in next 2-4 quarters," the brokerage firm says.

Analysts at ICICI Direct said that the stock has grown at ~8% CAGR from ~| 857 levels in May 2018, outperforming the wider Nifty Auto index.

"We retain 'BUY' tracking robust response to new launches in the SUV space with a resultant order backlog of ~2.9+ lakh units and consequent increase in capacity in a phased manner, focus on market share gains in tractor domain with series of new launches, amid persistent focus on capital efficiency," the brokerage firm said.

"Revising our estimates, we value M&M at SOTP-based TP of | 1,600 (8x FY25E standalone EV/EBITDA; 40% hold company discount to investments, | 218/share value accrued pursuant to equity raise for electric PV arm)," it added.

According to analysts at Motilal Oswal, the company's auto segment will be a key driver for its growth in the next few years. The brokerage firm has given a 'BUY' rating for the auto major, with a target price of ₹1,500 per share. The analysts at Nuvama have maintained a 'BUY' rating with a revised target price of ₹1,470 owing to an increase in production capacity in CY23. The company, which has been grappling with semiconductor woes for its XUV700, Thar and Scorpio-N, plans to increase its production from its current capacity of 39,000 units to 49,000 units in the next 6-7 months. For CY23, the company will not be launching any new products but will be focusing on consolidating its product range.  

The auto major has also increased its capital expenditure outlay to ₹15,900 crore from ₹15,075 crore for FY22 to FY24. For its ICE business, the capex outlay has been increased by 20% to ₹9,500 crore from ₹7,900 crore earlier, whereas for Mahindra Electric Automobile Limited (MEAL), its EV subsidiary, the company has increased the capex by 54% to ₹3,200 crore from ₹2,075 crore.

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