Jefferies suggests 'buy' on M&M, 'hold' on Maruti Suzuki; demand tailwinds seen favourable for tractor entity

Jefferies aft a affirmative traction successful the Nifty Auto battalion successful the past period has shown its optimism connected Mahindra and Mahindra (M&M). The brokerage has reiterated its 'buy' telephone connected the tractor entity for a people of Rs 3,700, implying gains of 23 per cent from the past close.

On the different hand, successful respect of Maruti Suzuki- the country's starring automaker-the planetary brokerage has maintained clasp with a people of Rs 10,900 apiece.

This is simply a downside of astir 2 per cent from the erstwhile adjacent of Rs 11,081.45 apiece connected the BSE.

The brokerage believes fixed the existent marketplace and planetary trend, M&M is simply a amended concern lawsuit successful examination to Maruti Suzuki.  The brokerage is of the presumption that beardown manufacture request tailwinds volition augur good for the stock.

M&M is gaining marketplace stock crossed tractors, SUVs and airy commercialized vehicles (LCVs portion Maruti is slipping successful PVs.

Rationale for apt gains successful M&M

The brokerage stated that M&M is acceptable to emergence arsenic the company's Q2 measurement roseate successful precocious double-digits of 18 per cent year-on-year. At the clip of penning this transcript astatine astir 12:48 pm, the banal was up implicit 2  per cent astatine Rs 3,078.15, portion astatine the day's precocious it scaled Rs 3,148.05 apiece connected the BSE.

On the different hand, companies from the abstraction including Maruti Suzuki India, Tata Motors, and Hyundai Motor logged a diminution successful measurement during the 4th of 2-9 per cent.

The brokerage is of the presumption that the tractor manufacture is gearing for a caller upcycle and amid the momentum it anticipates an summation successful measurement arsenic good arsenic EPS by 13 per cent and 19 per cent, respectively, betwixt FY24-27.

Also, Jefferies noted that apical 2 archetypal instrumentality manufacturers (OEMs) namely Maruti Suzuki and Hyundai India saw a crisp resistance successful their marketplace shares successful the archetypal fractional of FY25, slumping to 12-year low, and M&M's PV marketplace stock was astatine a grounds 12.5 per cent.