M&M Hits A Record As Analysts See New Scorpio Aiding Market Share, Rerating

Shares of Mahindra & Mahindra Ltd. jumped to a record high as analysts reiterated their ‘buy’ calls on the automaker after the launch of a new sport utility vehicle.

The company launched Scorpio-N starting at Rs 11.99 lakh, according to an exchange filing on Monday evening after market hours. The vehicle is available in five variants and in seven colours.

Analysts, including at Credit Suisse, Nomura and CLSA, expect the new Scorpio-N to boost M&M’s SUV line-up and lead to an increase in volume market share, as well as trigger a rerating for the stock. The car’s new design, safety and connectivity features, and competitive pricing augur well for the company, they said in their research reports.

The analysts also expect the new Scorpio-N to be a “strong success” similar to the XUV700 and the Thar, and see room for improvement in M&M’s volume if the chip supply issues ease further.

The automaker is simultaneously unveiling the Scorpio-N in South Africa and Nepal, along with India, according to the filing. The new SUV, it said, has the lowest carbon dioxide emission in the segment.

Shares of M&M jumped more than 3.5%, the most in this week, to a fresh record of Rs 1,121.45 apiece. The stock is on course for a four-day winning streak, up 13% during the period. It’s the top gainer on the Nifty Auto index. The trading volume is more than quadruple the 30-day average.

Of the 46 analysts tracking the company, 43 maintain a ‘buy’, one suggests a ‘hold’ and two recommend a ‘sell’, according to Bloomberg data. The overall 12-month consensus price target implies an upside of 3.9%.