M&M Shares Gain 14% in 4 Days as Investors Applaud Scorpio-N Launch; Should you buy, sell or keep?

M&M share price: Mahindra and Mahindra (M&M)’s share price rose around 4% in a weak market a day after (Tuesday) the automaker launched ‘the daddy of the SUV offering’, the all-new Scorpio. For now, M&M has only announced the prices for the manual transmission variants starting at Rs 11.99 lakh and ranging up to Rs 19.49 lakh. Pricing for the automatic variants as well as the four-wheel-drive variants will be announced on July 21, according to the release. The company unveils the new product in South Africa and Nepal simultaneously. And, he intends to introduce this vehicle in Australia and New Zealand shortly.

M&M stock price history

On Tuesday, the certificate hit a record high of Rs 1,121 on BSE. It has risen over the past four days and is up 14% over the period.

A few analysts said M&M could be one of the main beneficiaries of the strong commercial vehicle (UV) model cycle as they set price targets on the stock up to Rs 1,315, suggesting up to 17% of upside potential on the counter.

What should investors do?

Nomura said the all-new Scorpio-N is another potential winner and could incrementally add a 10-15% uplift to overall volumes in the commercial vehicle space in fiscal year 23-24.

M&M’s commercial vehicle market share improved to 17% in May 2022 from 13-14% in FY21-22.

Emkay Global said the July 30 launch of Scorpio-N would further support bookings. Given expectations of a staggered improvement in chip supplies and a large order book, it raised volume estimates for M&M by 3% each for FY23 and FY24. This brokerage increased its estimates EPS for fiscal years 23/24 by 6% due to an increase in margin assumptions.

“We have a buy rating with a target of Rs 1,250 vs. Rs 1,150 earlier, based on 16 times June 2024 basic EPS (based on DCF) and value of investments at Rs 482 per share . We are increasing the valuation multiple to 16 times from 14, taking into account higher revenue growth and margin assumptions in our DCF model,” Emkay said.

ICICIdirect, in a note, said M&M is steadily transforming with a pipeline of exciting launches on the PV and LCV electric front amid a changing technology landscape in the automotive space.

M&M plans to unveil its August 15-born electric strategy, it said, while maintaining its positive view of the automaker amid a healthy demand outlook for its product profile, focusing on fuel efficiency. capital and the proactivity of electric vehicles. The brokerage has a target of Rs 1,315 on the stock.

Share India’s Ravi Singh said that with the popularity of SUVs among customers and the advanced features of Scorpio N at a competitive price, the global launch could be a game-changer in the SUV market. He said the certificate has already started showing enthusiasm and it may soon reach the level of Rs 1,250.

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