Stating SUVs and farm implements to be excessive development segments, brokerage agency Nomura maintained its purchase score on with a goal worth of Rs 1,718, which reveals an upside potential of 25% from the present market worth of Rs 1,368.

“M&M stays our prime choose. The corporate has been gaining a share throughout segments. We elevate SUV quantity development to 58.5%/18%/ 8.5% for FY23F/24F/25F (~2% enhance). We see upside from, in Born EVs, farm implements, and investments,” Nomura mentioned.

Nomura additional mentioned that it was impressed with the enticing designs of ‘Born Electrical’ automobiles, which have been showcased on the Mahindra EV Pageant on February 10, 2023 in Hyderabad. These e-SUVs are based mostly on the INGLO platform, which is technologically very superior. INGLO has the potential to pack excessive density batteries (of 60-80kWh) with as much as 700 NM torque.

“M&M has additionally been enhancing its model enchantment, with its deal with core SUVs. Therefore, ASPs have the potential to rise additional when these e-SUVs are launched. Additionally, if present regulatory help continues, EV penetration for M&M might even attain 30-40% by FY27F vs steering of 20-30%, in our view,” the brokerage agency mentioned.

M&M’s tractor division development outpaced the trade at ~15% year-year (YoY) in 3QFY23. Its market share improved sequentially to ~41% in 3QFY23, in contrast with ~40.1% in 2QFY23. Nomura expects M&M’s tractor division’s development to be greater than the general trade, because it elements in a better market share.

For the December ended quarter, the auto main posted 14% development in standalone internet revenue at Rs 1,528 crore for the quarter ended December 2022. The corporate had reported a internet revenue of Rs 1,335 crore in the identical interval final 12 months. Income from operations, in the meantime, surged 41% YoY to Rs 21,654 crore within the December quarter.

The brokerage mentioned, “3QFY23 income numbers have been largely according to our and Bloomberg consensus estimates. EBITDA margin at 13% (up ~110bp q-q) was according to our/consensus estimates of 13%/12.8%. Adjusted PAT elevated 51% q-q to Rs 20.2 billion, in contrast with our estimate of Rs 16.4 billion.”In administration commentary, M&M mentioned that the SUV order guide elevated to 266k+ (260k in 2QFY23), partly offset by cancellations in Scorpio-N on excessive ready durations. Order influx was sturdy at ~50k/month. XUV400 clocked 15,000 bookings in 13 days.