Mahindra & Mahindra (M&M) share price are gaining traction after a sharp decline in the past few days. The stock is currently trading at Rs 2,710.80, up 1.55% in intraday trading.
The brokerage firm Jefferies has given a ‘Buy’ rating on M&M, setting a target price of Rs 4,075.
Let’s take a look at the five key reasons why Jefferies believes this is a buying opportunity for M&M investors.
Jefferies on M&M: Limited impact on M&M from Tesla in near-term
The brokerage house in its report said that M&M shares have fallen 14% in the last 10 days, while the Nifty 50 index has only dropped 1%. This sharp dip is primarily due to concerns over Tesla’s entry into India and M&M’s EV order book.
However, Jefferies believes the impact on M&M will be limited in the near term due to the difference in price points and the government’s EV policy.
“We see the recent fall in MM as a buying opportunity. Its 20x core FY26E PE is attractive for 18% FY25-27E EPS CAGR,” says the brokerage in its report.
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Furthermore the brokerage in its report noted that the Indian government announced a new EV policy in March 2024 to attract foreign investments. “OEMs that commit to invest at least Rs42bn ($0.5bn) in manufacturing are allowed to import up to 8K vehicles/year (CIF value $35K+) at a reduced import duty of 15% (vs 70-100% currently) for 5 years,” said the brokerage in the report.
However, the impact on M&M is expected to be minimal due to high price limits and import volume restrictions under the policy.
Jefferies on M&M: Tesla’s potential entry not major threat
Many fear that Tesla’s potential entry into India could impact domestic automakers. However, Jefferies disagrees with is and noted that , “We don’t see Tesla’s potential entry as a significant threat to MM given: 1) the large gap in existing portfolio prices, 2) lack of visibility on Tesla’s plans for local manufacturing, and 3) EVs form just 3-5% of our FY26-27E total volume estimates for MM.”
Jefferies on M&M: Strong demand for EVs
M&M’s new electric SUVs,
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