Prabhudas Lilladher's research report on Mahindra and Mahindra
M&M unveiled first electric SUV – XUV400, based on its XUV300 subcompact SUV. With this launch, M&M has notched up the competition in the affordable e-SUV segment in India, which is currently ruled by Tata Nexon EV (Tata recorded 87% EV market share in FY22). XUV400 comes with a battery pack of 39.4 kWh, similar to Nexon EV Max’s 40.5 kWh. However, compared to 437km range in a single charge from a slightly bigger battery pack in Nexon EV Max, XUV400’s battery offers a longer range of 456km – owing to better technology. M&M believes, there remains a vast electric opportunity in the C-segment (4-4.5m), contrasting to Tata Nexon EV’s presence in the B-segment (3.85-4m, Nexon EV has 3.5% share in this segment). We expect XUV400 to come with a price tag of Rs 18-20 lakhs, similar to its competition Nexon EV Max. Price announcement, Bookings are expected in Jan-23, deliveries will commence from end of Jan-23. M&M is one of our preferred picks in the auto space given (1) back-to-back successful launches in the highly competitive SUV space, (2) its leadership position in tractor industry, (3) its proactiveness to leverage the EV trend can lead to value unlocking and (4) its well-played out capital allocation strategy. Currently, we are not assigning any value to EVCo, as it doesn’t have any material presence in e-PV segment.
Outlook
However, success of XUV400 along with market share gains can re-rate the stock. Reiterate BUY with a Jun-24 target price of Rs 1,400 (18x on core EPS and Rs 285 for subsidiaries).
More Info
At 10:28 hrs Mahindra and Mahindra was quoting at Rs 1,300.50, up Rs 3.50, or 0.27 percent.
It has touched an intraday high of Rs 1,309.70 and an intraday low of Rs 1,296.45.
It was trading with volumes of 29,645 shares, compared to its thirty day average of 196,055 shares, a decrease of -84.88 percent.
In the previous trading session, the share closed down 0.30 percent or Rs 3.85 at Rs 1,297.00.
The share touched its 52-week high Rs 1,365.90 and 52-week low Rs 671.00 on 09 September, 2022 and 08 March, 2022, respectively.
Currently, it is trading 4.79 percent below its 52-week high and 93.82 percent above its 52-week low.
Market capitalisation stands at Rs 161,677.19 crore.
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