Mahindra & Mahindra (MM IN) – Q2FY27 Result Update – Resilient Quarter, Farm Tilling Through a Soft Patch – BUY
Published on 06 Nov 2026
MM’s Q2FY27 standalone operating revenue marginally beat estimates, while farm margins were weaker than expected. Expected softening of some RM, calibrated price increases, cost reductions and operating leverage are expected to improve overall margins in the near term. Core tractor margin is expected to be under pressure in Q3FY27, improve in Q4, normalize in FY28, whereas consol farm margins will be cushioned by international business restructuring benefits, pricing and accelerated exports. FY27 volume guidance for its SUVs was maintained at mid-to-high teens. All of its businesses, including the Growth Gems are also on track to scale up and deliver market leading returns. We estimate volume/realization CAGR of 7.4%/4.3% over FY26-29E, translating into revenue/EBITDA/APAT CAGR of 12.0%/10.0%/10.1%. We reiterate ‘BUY’ rating with TP of INR3,860 (previous INR3,750), valuing the core business at 22x P/E on Sep’28E standalone EPS, and its share of subsidiaries’ value.
