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Target: ₹3,347
CMP: ₹2,793.25
Mahindra & Mahindra (M&M) Thar Roxx launch come as more practical offering while carrying the lifestyle off-roader appeal of Thar 3 door. The product do offer clear distinction, Roxx to cannibalize Thar 3 door to some extent while will get additional customers from mid SUV segment given price overlap with better features on offer.
M&M continues to enjoy a strong order backlog of about 178k units (vs. about 220k units in Q4-FY24) of which Thar is aboutv42k units and launch of Thar Roxx should further build on the same. M&M’s recently unveiled XUV 3XO has seen a healthy response. M&M will continue to have a healthy launch pipeline as it targets to launch 9 ICE SUVs (includes 6 new launches and 3 mid-cycle upgrades), 7 BEVs and 7 LCVs by 2030. Driven by a strong order backlog and new launches, we expect M&M to continue outperforming industry growth even in FY25E.
We are building in SUV volume CAGR of 18.6 per cent over FY24-26E with overall revenue/EBITDA/Adj.PAT CAGR of 13.5/21/16.3 per cent. We maintain Add with TP at ₹3,347 as M&M trades at implied core PE of 24.6x/21.1x FY25E/FY26E EPS. We have tweaked our FY25/26 EPS by about 0.5 per cent.
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