Mahindra & Mahindra Stock Plunges 6%- Strong Drop in 7 Months, Down 17% in Two Weeks
Business and Industry Overview:
Mahindra & Mahindra (M&M) is an Indian automobile company based in Mumbai, Maharashtra. It started in 1945 as “Mahindra & Mohammed” and later became “Mahindra & Mahindra.” It is part of the Mahindra Group and is one of India’s largest vehicle makers. Mahindra & Mahindra Ltd is one of the most diversified automobile companies in India with presence across 2-wheelers, 3-wheelers, PVs, CVs, tractors & earthmovers. Mahindra Tractors is also the world’s biggest tractor manufacturer by volume. In 2018, Fortune India 500 ranked M&M as the 17th top company in India. Its main competitors are Maruti Suzuki and Tata Motors. The company’s CEO and MD is Dr. Anish Shah. M&M began as a steel trading business in Ludhiana, Punjab, founded by Kailash Chandra Mahindra, Jagdish Chandra Mahindra, and Malik Ghulam Muhammad. After the partition of India and Pakistan in 1947, Ghulam Muhammad moved to Pakistan, and the Mahindra brothers changed the company’s name. Mahindra also expanded into Turkey’s farm equipment market and invested in smart car tech and agro-tech firms. The company had a joint venture with Renault but ended it in 2010, though it still uses Renault’s engines. It also had a joint venture with Ford, but that ended in 2021. Mahindra makes different vehicles, including SUVs like Scorpio, Bolero, Thar, and XUV700, as well as electric cars, trucks, and tractors. It exports to many countries and has offices in the USA, Europe, South Africa, and Australia. Mahindra planned to sell diesel pickup trucks in North America in 2010 but faced legal problems. It is the largest tractor maker in the world. It sells tractors in over 40 countries, including the U.S., China, Africa, and Latin America. Mahindra & Mahindra started as a small steel business. Now, it is a global leader in cars, tractors, and machines. It also works in many other businesses like finance, auto parts, hotels, buildings, shops, transport, steel, IT, farming, aerospace, defense, energy, and consulting through its group companies.
Latest Stock News:
Mahindra & Mahindra Ltd’s stock fell by 6.08% to ₹2,667.55 at 2:47 PM on 21 February. It was the biggest loser in the BSE ‘A’ group. About 2.15 lakh shares were traded, which is much more than the usual 69,060 shares per day in the last month.
The stock dropped 7% on Friday after the company’s board approved a ₹4,500 crore investment in its smaller companies through rights issues. The company shared this news through stock exchange filings on 20 February 2025.
Mahindra & Mahindra (M&M) reported a 19.6% increase in its total profit, reaching ₹3,180.58 crore for the third quarter (Q3) of the financial year 2024-25 (FY25). Last year, during the same period, the profit was ₹2,658.40 crore. This growth was mainly due to strong demand for its SUVs and tractors.
The company’s total revenue from all its businesses grew 17.7% from ₹35,218.32 crore last year to ₹41,464.98 crore this year.
M&M’s total profit includes money earned from financial services, IT, hotels, and other businesses.
On its own (without its smaller companies), M&M’s profit increased by 19% in Q3. It made a profit of ₹2,964 crore, compared to ₹2,490 crore in the same period last year. The company is India’s top SUV seller by revenue.
Potentials:
Mahindra & Mahindra has good chances to grow in the future. The company’s board has decided to invest ₹4,500 crore in its smaller businesses. This will help them grow and make more profit.
The company also shares 19.3% of its profits with investors as dividends. This makes it a good choice for people who want steady earnings from their investment. The stock price is 4.71 times higher than its actual value, which shows that investors trust the company. Company has been maintaining a healthy dividend payout of 19.3%
However, the company’s owners hold only 18.5% of the shares , which is low. If they buy more shares, it will show their confidence and attract more investors. Overall, Mahindra & Mahindra has strong potential for growth in the coming years.
Analyst Insights:
Key Financial Metrics:
Revenue: ₹41,464.98 crore (17.7% YoY growth)
EBITDA: ₹179.3 billion
Market Cap:₹ 3,31,941 Cr.
PE Ratio:26.8
Mahindra & Mahindra is growing steadily, driven by strong SUV and tractor sales. The company’s ₹4,500 crore investment in its subsidiaries can fuel future expansion. It also maintains a healthy 19.3% dividend payout, making it attractive for long-term investors. However, low promoter holding (18.5%) could be a risk factor.
The stock has strong fundamentals, but recent price drops and volatility should be considered. Investors should hold for the next 3-6 months to see if it rebounds. New investors can wait for a better entry point. Investors should hold the stock and stay invested for 3-6 months. The stock has performed well in the auto sector. Last week, it got many bookings, especially for its electric vehicles.