Mahindra and Mahindra Ltd., an outlier in the auto industry, has seen its stock zoom up nearly 9% in just one month and impressively it has nearly doubled in last one year.
M&M has been the highest wealth creator for its investors. Over the past month, the Scorpio-maker's shares have outperformed peers with a growth of 10.44%, while competitors like Maruti Suzuki India Ltd. and Tata Motors Ltd. have experienced declines.
If you look at the last six months, M&M still stands strong with nearly 18% returns, while the rest of the auto companies have struggled. Over five years, M&M has been the clear leader, with over four times the growth of Maruti, up 5.5 times.
M&M has been the highest wealth creator for its investors. Over the past month, the Scorpio-maker's shares have outperformed peers with a growth of 10.44%, while competitors like Maruti Suzuki India Ltd. and Tata Motors Ltd. have experienced declines.
If you look at the last six months, M&M still stands strong with nearly 18% returns, while the rest of the auto companies have struggled. Over five years, M&M has been the clear leader, with over four times the growth of Maruti, up 5.5 times.
M&M Auto Sales Seeing Strong Growth
From fiscal 2019 to 2024, M&M’s sales volumes have increased steadily, with a significant jump in fiscals 2023 and 2024. By FY24, M&M had been able to cross the 1 million-mark, by selling over 1.2 million units. Interestingly, automotive sales now contribute 69% of the total mix.
The revenue has skyrocketed from Rs 5.28 lakh crore in fiscal 2019 to Rs 9.87 lakh crore in fiscal 2024.
What Is Fueling The Growth?
M&M has strategically positioned its electric vehicle offerings to compete with top luxury car makers. Their EV launch has been at highly competitive prices.
Also the demand for SUVs has been extremely strong. To meet this demand, M&M has made significant reductions in waiting periods. And hence, M&M's strategic foresight in scaling up manufacturing capabilities is finally paying off.
SUV Sales On A Steady Uptrend
Overall trend shows consistent growth month after month. This surge in SUV sales is a key driver of M&M’s growth story.
Capacity Addition To Meet Sales
M&M is scaling up production to meet the demand. Production capacity has more than doubled to 49,000 units per month in 2024 from 19,000 units in 2020. The company is now producing 5.88 lakh units annually.
Looking ahead, M&M plans to reach 64,000 units per month by 2025 and targets 72,000 units per month by 2026. This shows M&M’s clear strategy to meet rising demand and expand production capabilities.
As a part of the aggressive push into the electric vehicle segment, M&M is also planning to add 10,000 EV units per month by March 2025.
Brokerages Upbeat On M&M
Morgan Stanley has given M&M an 'overweight' rating with a target price of Rs 3,336 per share.
While, Nuvama and Motilal Oswal Financial Services Ltd. also have 'buy' ratings, with target prices of Rs 3,700 and Rs 3,420 per share, respectively.
But even as brokerages are positive on the stock, some questions remain.
Will the Mahindra XUV 9e become a serious challenger to luxury electric cars? How well will M&M’s capacity addition plans scale to meet growing demand? And how much further can M&M reduce waiting periods for its popular SUVs?
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