M&M's growth engines roar to life, launches to drive gains

SUCCESS MILEAGE: Investor confidence accelerates with growth focus

- RAM PRASAD SAHU

The stock of Mahindra & Mahindra (M&M) has been touching successive all-time highs on the bourses and, over the past year, gained 81 per cent. While the S&P BSE Auto Index has not performed poorly, registering gains of 73 per cent, it still trails the company by 800 basis points (bps) during this period.

There are multiple reasons why investors are beating a path to M&M's counter. The success of launches, the focus on growth, the hopes of a recovery in tractor sales, and below-industry valuations are attracting investor interest.

Among the recent triggers are launches and market-share gains. The company's value market share went up by 230 bps year-on-year (Y-o-Y) to 14.4 per cent in 2023-24 (FY24), and it has likely become the No. 2 player in the passenger vehicle industry, says Axis Securities.

Analysts, led by Nishit Jalan, believe that the strong performance of the Scorpio, whose revenue has doubled Y-o-Y, and the Thar/XUV700 were the key drivers of share gains. The company is the market leader in the mid-sport utility vehicle (SUV) segment as well as the premium SUV segment, with a share of 36.9 per cent and 30.6 per cent, respectively.