 "mahindra logo, mahindra")
mahindra logo, mahindra(Photo: Reuters)
M&M in focus: Stocks of auto manufacturer Mahindra and Mahindra (M&M) rose as much as 3.35 per cent to hit an intraday high of Rs 2,837.90 per share on Friday, August 16, 2024.
The surge in the stock price followed the company’s announcement of the launch of Thar ROXX, its latest sports utility vehicle (SUV).
This segment of the market constitutes about 45 per cent of the Indian SUV industry, with M&M holding approximately 27 per cent of the market share, according to company management.
Veejay Nakra, president of automotive division at M&M, said, “With Thar ROXX, we’re not just elevating the SUV experience—we’re setting our sights on making the Thar brand the No. 1 SUV (>12.5 Lakh segment) by volume within the next 3 to 5 years.”
International brokerage Nomura praised M&M’s consistent success in launches, noting that each new model, including facelifts and variants, demonstrates substantial innovation and improved appeal. The Thar ROXX, in particular, represents a major upgrade over the 3-Door Thar.
Additionally, the bookings for the Thar ROXX will open online and at M&M dealerships starting October 3, 2024, with test drives available from September 14, 2024. Deliveries are set to begin this Dussehra.
According to Nomura, given the vehicle’s pricing and distinctive design, monthly sales could reach 8,000 to 10,000 units. The initial response is expected to be strong, with around 50,000 bookings anticipated on the first day. However, there may be some cannibalisation of sales from the existing Thar 3-Door variant, which currently sells around 5,000 to 6,000 units per month.
Analysts have factored in a sales estimate of approximately 10,000 units per month for the Thar Family in FY26, which could increase if the Thar ROXX meets its ambitious sales goals.
If successful, analysts believe, the Thar ROXX could reshape the urban SUV market and solidify M&M’s position as the leading SUV manufacturer in India in the medium term.
“We maintain our estimates that MM’s SUV can grow at an approximately 15 per cent compound annual growth rate (CAGR) over FY24-27F, well ahead of the industry’s 4-8 per cent CAGR. Our SUV unit sales estimates for MM in FY25F/26F/27F are approximately 533,000 (+16 per cent Y-o-Y)/636,000 (+19 per cent Y-o-Y)/701,000 (+10 per cent Y-o-Y). We maintain MM as our top pick in OEMs,” said analysts at Nomura.
The brokerage has also maintained its ‘Buy’ rating with an unchanged target price of Rs 3,417 per share.
At 12:00 PM, shares of M&M were trading 1.77 per cent higher at Rs 2,794.45 per share. In comparison, BSE Sensex was trading 0.71 per cent higher at 79,671 levels.
First Published: Aug 16 2024 | 12:06 PM IST
