A technician performs final tests on a Mahindra 6500 4WD tractor at Mahindra & Mahindra Ltd.’s farm equipment facility (Photographer: Santosh Verma/Bloomberg News)

M&M’s Market Cap Crosses Rs 1 Lakh Crore. What’s Next?

The market capitalisation of Mahindra & Mahindra Ltd. crossed the Rs 1 lakh-crore-mark for the first time ever, after shares of the world’s largest tractor maker surged to an all-time high on Tuesday. The stock rose 2.20 percent to Rs 819.10 apiece.

M&M’s Market Cap Crosses Rs 1 Lakh Crore. What’s Next?

What Lies Ahead?

As high as 95 percent of the analysts tracking the company have a ‘Buy’ recommendation with a target price of Rs 890, indicating a return potential of close to 10 percent which is the highest amongst its peers.

M&M’s Market Cap Crosses Rs 1 Lakh Crore. What’s Next?

The company is likely to benefit from an expected jump in demand following a higher minimum support price for agricultural produce and forecast for a normal monsoon for a third straight year, brokerage CLSA said.

Valuation wise, the stock trades at 13 times the financial year 2018-19 price-to-earnings versus historical average of 15 times.