Hold Mahindra & Mahindra; target of Rs 1,330: Religare

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26 Aug, 2025 12:21

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Religare’s research report on Mahindra & Mahindra;

We attended Mahindra & Mahindra’s KUV100 launch today at the company’s Chakan plant in Pune. Aggressively priced at Rs 442,000- Rs 676,000 and positioned as a mini SUV, the KUV100 will go head-on against B-segment hatchbacks Maruti Swift and Hyundai Grande i10. The launch also marks MM’s entry into the PV petrol segment, with the new 1.2ltr petrol (as well as diesel) variants and attractive pricing set to lure first-time SUV buyers. We estimate monthly volumes for KUV100 to be in the sub-5000 range. Maintain HOLD; Sep’16 TP Rs 1,330.

Competing with 4W giants: MM has launched the KUV100 in eight variants, both petrol and diesel, in an attractive price range of Rs 442,000-Rs 676,000 (ex-showroom Pune). Slated as direct competition to Maruti Suzuki’s Swift and Hyundai’s Grande i10, the KUV100 would compete in the sub-4m hatchback and sedan segment (~50% of PV market). The KUV100 will have the new 1.2ltr petrol and diesel engines from the newly-launched mFalcon engines built to deliver high low-end torque for a peppy performance. MM has incurred ~Rs 12bn on the product and new engines.

Marks entry into petrol segment: The KUV100 marks MM’s entry into compact petrol hatchbacks with a SUV-stance product. The foray into petrol engines would further expand to 2.2litre engines for Scorpio and XUV500, post which company would look at the 1.5litre variant. Establishing its footprint and competing with established petrol hatchbacks remains a key task ahead for MM. 

Volume expectation: KUV100 will be manufactured on the same line as XUV500 with a combined monthly capacity of 9,000 vehicles, which would expand to 12,000 units in the next three months. Starting volumes are expected to be in the sub-5,000 range.

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Maintain estimates; HOLD: We expect new launches to aid auto segment volume growth for MM, while the tractor segment remains under pressure. We largely maintain estimates and our HOLD rating on the stock with a Sep’16 TP of Rs 1,330. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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