On Friday, August 16, 2024, shares of the car manufacturer Mahindra and Mahindra (M&M) increased by up to 3.35%, reaching an intraday high of Rs 2,837.90 a share.
The release of the company's newest sports utility vehicle (SUV), Thar ROXX, was followed by a sharp increase in stock price. The base MX-1 (petrol) form of the Thar ROXX costs Rs 12.99 lakh, while the diesel model starts at about Rs 13.99 lakh (ex-showroom). The cost of the more expensive models will be revealed later.
According to business management, this market category accounts for over 45% of the Indian SUV sector, with M&M owning a roughly 27% market share.
"With Thar ROXX, we're not just elevating the SUV experience - we're setting our sights on making the Thar brand the No. 1 SUV (>12.5 Lakh segment) by volume within the next 3 to 5 years," stated Veejay Nakra, head of M&M's automotive division.
Global stockbroker Nomura commended M&M for its continuous success with product introductions, pointing out that every new model—including facelifts and variants—displays significant innovation and increased appeal. Specifically, the Thar ROXX is a significant improvement over the 3-Door Thar.
Furthermore, test drives will be available for the Thar ROXX starting on September 14, 2024, and reservations for the vehicle will be accepted online and in M&M dealerships beginning on October 3, 2024. This Dussehra, deliveries are scheduled to start.
Nomura estimates that given the car's price and unique style, monthly sales might be between 8,000 and 10,000 units. It is predicted that there would be a robust first response, with around 50,000 reservations on the first day. Though sales of the current Thar 3-Door model, which sells between 5,000 and 6,000 units per month, may be somewhat cannibalized.
For the Thar Family, analysts have projected sales of about 10,000 units per month in FY26; however, if the Thar ROXX reaches its high sales targets, that number might rise.
In the medium run, analysts predict that if the Thar ROXX is successful, it would change the urban SUV industry and establish M&M as the top SUV maker in India.
"We continue to believe that MM's SUV can expand at a compound annual growth rate (CAGR) of about 15% over FY24–27F, which is much faster than the industry's CAGR of 4%–8%. For MM in FY25F/26F/27F, our estimated SUV unit sales are around 533,000 (+16% Y-o-Y)/636,000 (+19% Y-o-Y)/701,000 (+10% Y-o-Y). We continue to rank MM as our #1 choice among OEMs, according to Nomura analysts.
Additionally, the firm has kept its "Buy" recommendation intact, with a target price of Rs 3,417 per share. M&M's stock was trading 1.77 percent higher at Rs 2,794.45 a share at 12:00 PM. By contrast, the Bombay Stock Exchange Sensex was up 0.71% at 79,671 points in trade.
