Mahindra & Mahindra (M&M) Stock Skyrockets: 160% Gain in 2 Years, 490% Surge in 4 Years

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  <li>In recent years, there has been a significant surge in vehicle demand in India, fueled by increased economic activity leading to higher disposable incomes, growth in the working population, an expanding middle class, low vehicle penetration ratios, expanding highways, and evolving consumer preferences favoring vehicle ownership.</li>
  <li>Additionally, regulatory initiatives such as the phasing out of old vehicles and the non-renewal of registration for 15-year-old government vehicles have stimulated demand for new vehicles.</li>
  <li>In the fiscal year 2023–24, passenger vehicle sales in India reached record levels, exceeding 4.2 million units, particularly driven by robust growth in the sports utility vehicle (SUV) segment.</li>
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<p><strong>India's vehicle demand surges as economic growth and regulatory measures drive record sales.</strong></p>
<h2><strong>Boosts its SUV market presence</strong></h2>
<p>In FY24, the company experienced significant growth in its SUV revenue market share, climbing by 130 basis points year-on-year to reach 20.4%. This remarkable achievement was fueled by the company's best-ever sales performance, with a total of 459,877 units (SUVs) sold during FY24.</p>
<h3><strong>SUVs: Accelerating ahead</strong></h3>
<p>Sports utility vehicles (SUVs) have emerged as a dominant force in the passenger vehicle (PV) segment. Recognised for their versatile road capabilities and dynamic presence, SUVs have surpassed traditional preferences, capturing the attention of a growing demographic.</p>
<p>Beyond their visual appeal, SUVs offer a compelling blend of performance, spaciousness, and adaptability, making them a preferred choice among consumers seeking a versatile driving experience.</p>
<p>As India's road infrastructure evolves to encompass diverse terrains, the inherent versatility of SUVs meets the changing needs of drivers navigating city streets, highways, and beyond. The combination of an elevated driving position and a sturdy design that commands attention has propelled SUVs into the spotlight, marking a significant shift in automotive preferences.</p>
<h2><strong>Future growth trajectory</strong></h2>
<p>Looking ahead, Mahindra & Mahindra aims to sustain its growth momentum through a robust launch pipeline. The company plans to introduce nine ICE SUVs, including six new launches and three mid-cycle upgrades, along with seven battery electric vehicles (BEVs) and seven light commercial vehicles (LCVs) by 2030, according to Q4 earnings report.</p>
<p>To support its ambitious growth plans, Mahindra & Mahindra is strategically ramping up its production capacity. By the end of FY25 and FY26, the company aims to increase its monthly production capacity to 64,000 and 72,000 units, respectively, compared to 49,000 units per month at the end of FY24.</p>
<p>This capacity expansion includes an additional 15,000 units allocated for Thar 5D, XUV 3XO, and XUV 400, along with 10,000 units dedicated to electric vehicle (EV) production. With an additional 8,000 units of EV capacity planned.</p>
<p>Bolstered by a strong order backlog and upcoming launches, domestic brokerage firm, Motilal Oswal anticipates M&M to continue outperforming industry growth in FY25, projecting a 14% volume CAGR in UVs over FY24–26E.</p>
<h3><strong>Conclusion</strong></h3>
<p>Mahindra & Mahindra's strategic initiatives and robust growth in the SUV segment underscore its market leadership and potential for continued success. With a strong launch pipeline and capacity expansion plans, the company is well-positioned to capitalize on the growing demand for SUVs and electric vehicles, ensuring sustained growth and value for its shareholders.</p>