M&M Share Price Jumps Over 4% on UBS Upgrade
Shares of Mahindra & Mahindra surged on Wednesday, March 5, 2025, after UBS upgraded the stock rating to ‘buy’ from ‘neutral’. Investors reacted positively to the upgrade, pushing the stock up by nearly 5% in early trading.
At 13:08 PM IST, M&M shares were trading at ₹2,732.70 apiece on the NSE, up 4.53%, making it one of the top gainers on the NIFTY50 index. The rally was driven by strong demand forecasts in M&M’s SUV segment, along with optimism about upcoming electric vehicle (EV) launches.
UBS expects M&M’s SUV segment to witness high single-digit volume growth, with the company’s overall volumes projected to grow by 9% in FY26. The brokerage firm highlighted that the recent correction in M&M’s stock due to EV-related concerns was overdone and that the risk-reward ratio now favors investors.
Key Drivers Behind the Stock Rally
The sharp rise in M&M shares was fueled by several key catalysts, including:
1. UBS Stock Upgrade to ‘Buy’
- UBS revised its rating on M&M from ‘neutral’ to ‘buy’, signaling strong upside potential.
- The firm noted that the risk-reward dynamics had turned favorable for M&M after the recent correction in its stock price.
2. Strong SUV Segment Growth Prospects
- UBS expects M&M’s SUV volumes to rise by 9% in FY26, driven by strong demand and new model launches.
- M&M is likely to introduce more SUV models in FY26 to maintain its leadership position in the Indian market.
3. Robust Farm Equipment Demand
- M&M’s farm equipment business (FES) contributes 40% of EBIT and remains a key revenue driver.
- UBS highlighted stable demand in the tractor segment, with no regulatory or technology disruptions expected.
4. Stock Correction Presents a Buying Opportunity
- Companies share price had declined by 14.29% over the past month due to concerns over EV market disruptions.
- UBS termed this a short-term overreaction, noting that domestic SUVs contribute nearly 50% of Companies EBIT.
Stock Performance: Monthly and Yearly Trends
Despite today’s sharp rally, Companies stock has been volatile in recent months.
M&M Share Price Performance
| Timeframe | Change in Share Price |
|---|---|
| 1 Day | +4.53% |
| 1 Month | -14.29% |
| Year-to-Date (YTD) | -11.59% |
| 1 Year | +40.57% |
Company shares have declined 11.59% year-to-date (YTD), reflecting concerns about EV competition and market slowdown. However, over a one-year period, the stock has gained 40.57%, highlighting strong long-term investor confidence.
UBS Outlook on M&M: Key Insights
UBS, in its latest research report, provided an optimistic outlook for Company, citing:
- 9% Volume Growth in FY26 – Driven by SUV demand and EV launches.
- Farm Equipment Strength – No major technology or regulatory risks threatening growth.
- Correction Overreaction – The recent 14% drop in share price was deemed excessive, making the stock attractive.
- Stock Rating Upgrade – Risk-reward dynamics favor investors, supporting a ‘buy’ recommendation.
The broader industry slowdown is a concern, but UBS expects M&M’s diversified portfolio and strong domestic presence to drive future growth.
Impact of Tesla’s Entry on M&M
Another key highlight of the UBS report was the limited impact Tesla’s entry into India would have on Companies business.
UBS Analysis of Tesla’s India Plans
- The Tesla Model 3, the highest-selling model in the US, is not well-suited for India due to low ground clearance.
- The Tesla Model Y, which could compete with SUVs, is expected to cost ₹50-60 lakh (₹5-6 million), making it significantly more expensive than M&M’s offerings.
- M&M’s XEV 9e, a top-end electric SUV, has an estimated price of ₹33 lakh (₹3.3 million), making it a more affordable alternative.
- UBS’s Tesla analyst, Joseph Spak, believes that Tesla’s entry in India will be limited to imports in the near term, reducing competitive threats for company.
With Tesla’s entry expected to be restricted, Companies leadership in the domestic SUV and EV segment remains intact.
M&M’s February 2025 Sales Performance
Company posted strong sales figures for February 2025, reinforcing its market dominance.
February 2025 Sales Highlights
| Segment | Units Sold | YoY Growth |
|---|---|---|
| Total Sales | 83,702 | +15% |
| Utility Vehicles (Domestic) | 50,420 | +19% |
| Exports | 3,061 | +99% |
| Tractor Sales | 25,527 | +18% |
Key Takeaways from Sales Data
- Total sales surged 15% YoY, reaching 83,702 units.
- SUV sales in India grew by 19% YoY, reflecting strong consumer demand.
- Exports nearly doubled (+99% YoY), showcasing its growing international footprint.
- Tractor sales increased by 18% YoY, driven by stable demand in the agriculture sector.
Comapnies robust February sales performance signals strong business fundamentals and consistent demand across segments.
Final Thoughts on Growth Outlook
The recent 4% surge in M&M’s stock price reflects investor confidence following UBS’s positive outlook.
Key Takeaways from the Report
✔ UBS upgraded M&M to ‘buy’, projecting 9% volume growth in FY26.
✔ SUV demand remains strong, with more launches expected in FY26.
✔ Farm equipment business stable, with no major risks.
✔ Tesla’s India entry unlikely to impact its market share significantly.
✔ February sales up 15% YoY, reinforcing growth momentum.
While short-term volatility persists, Companies strong fundamentals, diversified portfolio, and increasing sales make it a promising long-term investment.
