M&M share price surges 3% after UBS upgrades auto stock to ’buy’, sees 22% upside

Mahindra & Mahindra (M&M) share price rose by more than 3% during Wednesday's trading session after global brokerage firm UBS upgraded the stock to a ‘buy' rating. M&M stock was the leading performer in the Nifty 50 index. Nonetheless, the brokerage has adjusted the target price lower to ₹3,300 from ₹3,460 earlier.

M&M share price today opened at an intraday low of ₹2,629.95 apiece on the BSE and touched an intraday high of ₹2,707.40. 

Investment rationale

In its report, the brokerage indicated that despite worries about a slowdown in the industry (with a growth rate of 2%), it anticipates M&M's volumes to increase by 9% in FY26, driven by high demand for its SUVs and the introduction of electric vehicles. While the 30,000 bookings for the newly launched EVs fell short of both their expectations and those of the market, it still represents a strong figure considering that EV volumes in January 2025 and the calendar year 2024 in India were 12,000 and 98,000 units, respectively.

"We expect more product intervention in SUVs from M&M in FY26. Moreover, farm equipments (FES), which accounts for 40%/30% of EBIT/ SoTP, is seeing robust demand with no imminent threat of technology or regulatory disruptions. The 19% share price correction over the last month (vs. Nifty Auto's 13% correction) on back of EV-related news flow is an overreaction, in our view, as domestic SUVs account for c50% of EBIT (UBS-e). We upgrade the stock to Buy as the risk/reward has turned favourable," UBS said in its report.

M&M shares: Technical outlook

Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, highlighted that M&M share price have seen a gap up opening and the stock is seeing a follow-up buying, with the next key resistance placed at 200 SMA around 2,750, with 2,550 acting as support. Traders can have a positive bias, using dips as a buying opportunity, Bhosale recommended.

Monthly Sales Update

Mahindra & Mahindra announced on Saturday, March 1, that its overall sales rose by 15 percent year-over-year to reach 83,702 units in February. Last February, the automaker recorded sales of 72,923 units.

In the utility vehicles category, the company reported selling 50,420 vehicles in the domestic market, representing a growth of 19 percent compared to the 42,401 units sold in February of the previous year.

Exports rose to 3,061 units last month, reflecting a 99 percent increase from 1,539 units in February 2024."This strong performance is a result of a continued positive momentum for our SUV portfolio," M&M Automotive Division President Veejay Nakra said in a statement.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.