M&M shares fall despite 33% rise in Q3 profit; should you buy the dip?

M&M share price: Shares of Mahindra & Mahindra Ltd declined more than 1 per cent in early trade on Thursday, even as the company reported strong December quarter earnings.

The stock opened at Rs 3,674.40, nearly unchanged from its previous close of Rs 3,674.90. It slipped to an intraday low of Rs 3,613. At around 10:15 AM, the stock was trading at Rs 3,648.60, down Rs 26.30 or 0.72 per cent for the day, indicating mild profit booking after recent gains.

Standalone profit up 33%

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For the December quarter of FY26, Mahindra & Mahindra reported a 32.62 per cent year-on-year rise in standalone profit after tax at Rs 3,931.3 crore. The company had posted a net profit of Rs 2,964.31 crore in the corresponding quarter last year.

Revenue from operations grew 26.12 per cent to Rs 38,516.81 crore in Q3FY26, compared with Rs 30,538.23 crore a year ago. The growth was driven by strong demand in the SUV portfolio and steady performance in the farm segment.

EBITDA increased 20.72 per cent to Rs 5,293 crore from Rs 4,384 crore in Q3FY25. However, EBITDA margin moderated to 13.74 per cent from 14.36 per cent in the year-ago period, reflecting higher input costs and operating expenses.

Anish Shah, Group CEO and Managing Director, said the group delivered solid operating performance during the quarter, supported by strong product acceptance and disciplined execution across businesses. He added that the Auto and Farm segments maintained their leadership positions.

Consolidated profit jumps 47%

On a consolidated basis, net profit rose 47 per cent year-on-year to Rs 4,674.7 crore, compared with Rs 3,180.6 crore in Q3FY25. The profit growth factors in the impact of expenses related to the labour code.

Consolidated revenue increased 24.4 per cent to Rs 51,580 crore, marking the first time the company has crossed the Rs 50,000 crore revenue milestone in a single quarter.

The company continues to benefit from robust demand in utility vehicles, improved product mix and strong execution in the tractor business.

M&M share price target 2026

Brokerages largely retained their positive stance on the stock, with many raising their target prices after the results.

Nomura maintained a ‘Buy’ rating and raised its target to Rs 4,662 from Rs 4,355, citing strong outlook across segments and continued SUV outperformance.

JP Morgan retained ‘Overweight’ with a target of Rs 4,300, while UBS maintained ‘Buy’ and increased its target to Rs 4,570.

Morgan Stanley kept an ‘Overweight’ rating but trimmed its target to Rs 4,358. It said the quarter was largely in line and flagged possible moderation in tractor and UV growth in FY27, with recovery expected in FY28.

CLSA maintained ‘Accumulate’ and raised its target to Rs 4,702, highlighting M&M’s revenue leadership in utility vehicles and strong launch pipeline. It expects around 20 per cent EBITDA CAGR over FY26–FY28.

Goldman Sachs reiterated ‘Buy’ with a target of Rs 4,400. Jefferies also maintained ‘Buy’ with a target of Rs 4,500, noting that the company delivered its 15th consecutive quarter of double-digit EBITDA growth.

Bernstein retained ‘Outperform’ with a target of Rs 4,200, saying performance across auto, farm and subsidiaries was strong. HSBC maintained ‘Buy’ with a target of Rs 4,250 but warned that a strong or early El Niño could pose downside risks to tractor volumes.