Auto stock to buy now for an upside of 27% after it achieves highest SUV car sales
Auto stock to buy now for an upside of 27% after it achieves highest SUV car sales
Mahindra & Mahindra has shattered its previous sales records by delivering 54,504 SUVs in October 2024. Furthermore, the automotive giant witnessed an impressive 25% year-over-year growth from October 2023. The company has maintained its upward trajectory, building upon September’s strong performance of 52,590 units.
The surge primarily stems from the overwhelming response to the new Thar ROXX. Notably, the model secured 1.7 lakh bookings within its first hour of launch. Additionally, the company’s diverse SUV portfolio, including the Scorpio-N and XUV700, continues to attract strong consumer interest.
Veejay Nakra, Automotive Division President at M&M, expressed enthusiasm about the achievement. “The festive season has significantly boosted our momentum across the SUV lineup,” he stated. Meanwhile, the company’s total vehicle sales reached 96,648 units, marking a solid 20% growth.
Goldman Sachs Endorsement Signals Strong Growth Potential
Goldman Sachs has added Mahindra & Mahindra to its Asia Pacific conviction list. Consequently, the brokerage firm maintains a “buy” rating with a price target of ₹3,600. This target suggests a potential 27% upside from current levels.
The investment bank points to M&M’s robust SUV order backlog as a key growth driver. Moreover, Goldman Sachs highlights the upcoming electric vehicle launches as crucial factors. The firm expects M&M’s EBIT to grow at a 20% CAGR between FY25 and FY27.
Another positive factor is M&M’s farm equipment division, which shows promising market dynamics. As a result of favourable monsoon conditions, the segment is entering a stronger growth phase.
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What led to this super performance?
The company’s strong performance reflects in its stock market showing. M&M emerged as one of the top five gainers on the Nifty 50 index during Samvat 2080. The stock has gained over 80% during this period.
Looking ahead, M&M’s growth strategy focuses on multiple segments. The company plans to expand its electric vehicle offerings. Additionally, it aims to strengthen its position in both passenger and commercial vehicle segments.
The automotive manufacturer maintains leadership across various sectors. Currently, M&M operates in farm equipment, utility vehicles, and information technology. Furthermore, the company holds the position of the world’s largest tractor manufacturer by volume.
M&M’s success stems from its comprehensive SUV lineup. The portfolio includes popular models like the Bolero, Thar, Scorpio-N, and XUV700. Therefore, this diverse range helps the company cater to different market segments effectively.
The company’s commercial vehicle division also shows strong performance. Specifically, domestic sales reached 28,812 units in October. This achievement contributes to M&M’s overall market dominance.
How will the company look going forward?
M&M’s global presence spans over 100 countries with 260,000 employees. Besides automotive and farm equipment, the company maintains strong positions in renewable energy and hospitality. Therefore, this diversification provides multiple growth avenues.
The company’s commitment to ESG principles adds another dimension to its appeal. Through various initiatives, M&M focuses on rural prosperity and urban development. Consequently, this approach aligns with modern investment preferences.
Despite minor EPS estimate adjustments, analysts remain optimistic. The stock currently trades at attractive valuations of 20 times FY26 estimated core EPS. Therefore, this presents a compelling investment opportunity.
This remarkable performance positions M&M strongly in India’s competitive automotive market. Through strategic product launches and market expansion, the company continues to strengthen its leadership position.
Written By Fazal Ul Vahab C H
Disclaimer
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