Broker’s Call: Mahindra & Mahindra (Buy)
SBI Securities
Mahindra & Mahindra Ltd (M&M) is a major player in the Indian automobile industry, offering a wide range of vehicles including SUVs, commercial vehicles, tractors, farm equipment, and three-wheelers. The company also holds stakes in various Mahindra group entities such as Tech Mahindra and Mahindra Holidays & Resorts. Recently, M&M acquired a majority stake in SML Isuzu, a commercial vehicle OEM focusing on the medium commercial vehicle segment.
Post GST rationalisation, vehicle prices have decreased, and consumer sentiment has improved, leading to a boost in demand across the Indian automotive industry. Factors such as a 125 basis points interest rate cut by the RBI, income tax cuts, and improving rural sentiment have further contributed to robust demand in passenger vehicle (PV), commercial vehicle (CV), and tractor segments.
The commercial vehicle industry is witnessing an upcycle with OEMs experiencing demand recovery in light commercial vehicles (LCV) and medium commercial vehicles (MCV) due to the start of replacement demand.
M&M enjoys strong brand loyalty, particularly in the SUV segment. The company's recent new launches, such as the XUV 700, Thar Roxx, XUV 3XO, Scorpio N, and Bolero Neo, have received positive feedback from customers. The Indian Passenger Vehicle industry has shifted towards SUVs, accounting for about 60% of total PV volumes.
M&M has consistently exceeded both the domestic PV industry growth and its own internal guidance over the past few years. The company recently unveiled two new Born Electric SUVs, BE 6 and XEV 9E, which have been met with a stellar response. M&M's EV market share has increased from 5% before the launch of these electric vehicles (EVs) to approximately 20% currently. Additionally, the company has recently launched a new seven-seater electric SUV, XEV 9S, expected to further boost its market share.
In the tractor industry, M&M holds a leading market share of 44% and has strengthened its presence in the lower horsepower segment through the Oja brand.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
