The brokerage has a “buy” rating on the M&M stock with a price target of ₹4,580 per share, an upside of 52% from its previous closing price.
Nomura said the company’s capacity and model cycle is set to drive its growth.
Listing takeaways from the Asia conference, Nomura said M&M is optimistic on utility vehicle demand outlook of mid-to-high teens volume growth for SUVs in the financial year 2027. Most of the models have high demand, but supplies have been affected over the past two months.
M&M expects this issue to be resolved the coming months. It also expects the SUV capacity to expand from 64,500/month to 68,000 by September 2026 and 82,000 by March.
The launch of the NU-IQ platform will be supported by this capacity expansion, Nomura said.
The company plans to launch 10 (Internal combustion engine) ICEs and six battery electric vehicles (BEVs) over FY27-31.
Its Nagpur plant will eventually have a capacity of 5 lakh SUVs and 1 lakh tractors. The plant will commence operations in 2028, it said.
On another note, M&M has retained its estimates of mid-single-digit tractor industry growth, even though concerns persist around a below-normal monsoon and the potential impact of El Nino.
Earlier this week, M&M’s president farm equipment business, said the growth forecast already factors in the possibility of weather-related disruptions. He said at present, the industry is benefitting from a low base, strong farm cash flows and positive rural sentiment.
Of the 41 analysts who have coverage on M&M, 39 have a “buy” rating and two have a “hold” rating.
M&M shares were trading 0.7% up at ₹3,037.4 apiece at 2.15 pm on Friday. The stock has declined 19.4% this year, so far.
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