Mahindra & Mahindra (M&M) shares were on the investors’ radar on Tuesday, as brokerages remained constructive on the automaker's long-term growth prospects, citing strong electric vehicle (EV) momentum and supportive policy measures. HSBC maintained its 'Buy' rating on the stock with a target price of Rs 4,200, implying an upside of about 36 percent from current levels.

M&M stock was trading at Rs 3,095.8, up 0.1 percent for the day. Over the past one year, the shares have slipped about 2.8 percent, compared with a 6.1 percent decline in the Nifty 50. The company commands a market capitalisation of around Rs 3.7 lakh crore.

HSBC said EV penetration in the passenger vehicle segment has increased sharply, strengthening M&M's positioning in one of the fastest-growing segments of the domestic automobile market. The brokerage also expects the company's original equipment manufacturer (OEM) margins to remain robust through FY27 and FY28, supported by a favourable product mix and improving scale in its EV business.

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Separately, Nomura said the Delhi government's new EV policy could provide an additional tailwind for companies with established electric vehicle offerings. The brokerage expects the government to invest Rs 15,000 crore during FY27-30 through a combination of EV incentives, charging infrastructure and tax concessions. It identified M&M, Tata Motors' passenger vehicle business, Ather and Sona BLW Precision Forgings as key beneficiaries of the policy.

Auto stocks witnessed a volatile session after the Delhi government unveiled its revised EV policy. The policy proposes that only electric three-wheelers will be registered from January 1, 2027, while registrations of new two-wheelers will transition to electric vehicles from April 1, 2028, accelerating the shift away from internal combustion engine vehicles. The Nifty Auto index initially declined on the announcement before recovering into positive territory as investors returned to select auto names.

According to Nitant Darekar, Research Analyst at Bonanza, the Rs 15,000 crore policy package, which excludes strong hybrids, is expected to benefit battery electric vehicle manufacturers. He said companies such as M&M, Tata Motors, TVS Motor and Bajaj Auto could gain from a replacement cycle driven by scrappage incentives and stronger EV adoption.

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