5 Minutes Read
Mahindra and Mahindra shares get an upgrade as analyst sees SUV 3XO as a game changer
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
M&M also announced on May 2 that its overall auto sales, including exports, for April 2024 have risen 13% year-on-year to 70,471 vehicles.
Mahindra and Mahindra shares have the potential to surge 15% (from the closing price of April 30), said brokerage firm DAM Capital Advisors and upgraded its rating on the stock to ‘buy.’
M&M shares surged almost 2% to ₹2,204 to hit an all-time high during the day on the NSE. The stock was among the top five Nifty 50 gainers and also outperformed the sectoral index Nifty Auto which traded 1.12% higher.
In the past year, the stock has given a return of 77% to its investors as against the benchmark Nifty 50 which has risen 25% during the period. The market capitalisation of M&M has now hit ₹2.73 lakh crore.
DAM Capital Advisors, meanwhile, has set the target price at ₹2,550 for M&M shares as it believes the carmaker’s stellar SUV performance and tractor recovery warrant valuation expansion.
The brokerage commentary comes days after M&M unveiled its compact sports utility vehicle (SUV) XUV 3XO, which the brokerage believes will be a major game changer for the company.
Mahindra’s XUV 3XO is a facelift of the XUV300 with prices starting from ₹7.49 lakh (ex-showroom). The new model, available in five trims, features a significantly revamped design, a new cabin, an array of added features and an updated automatic gearbox.
Also Read: M&M ED and CEO shares EV plans, says ready to compete with anyone amid Tesla entry news
M&M Executive Director and CEO for auto and farm Rajesh Jejurikar also told CNBC-TV18, “3XO is a disruptor product. We tried to excel in every dimension… XUV 3XO comes with many segment-first features and aggressive pricing.”
The Street also seems to have liked the pricing of the facelift vehicle, which is quite competitive pricing across variants ranges from ₹7 lakh to ₹15 lakh.
Meanwhile, M&M also announced on May 2 that its overall auto sales, including exports, for April 2024 have risen 13% year-on-year to 70,471 vehicles.
In the utility vehicles segment, Mahindra sold 41,008 vehicles in the domestic market, a growth of 18% and overall, 41,542 vehicles, including exports. The domestic sales for commercial vehicles stood at 22,102.
DAM Capital expects the company to sell more than 8,000 vehicles every month, which it believes would be a stable volume and would drive its SUV growth to 20% in FY25.
The brokerage expects a volume compound annual growth rate (CAGR) Of 10% over FY24-FY26 as against industry growth of 6-7%.
It said that M&M’s operating scale and better mix would drive earnings before interest, taxes, depreciation, and amortization or EBITDA margin expansion of 100 basis points from the current level to 13.8% in FY26. Tractor rebound and better pricing would also drive EBITDA margin expansion, it added.
M&M shares traded almost 2% higher at ₹2,197.50 on NSE at 1:08 pm.
Track latest stock market updates on CNBCTV18.com’s blog here
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Daily Newsletter
