Shares of M&M hit a record high of Rs 1,247. per share as they soared 7 per cent on the BSE on Monday, surpassing their previous high of Rs 1,192.55, hit on July 20, 2022. The company, on Saturday, recorded 100,000 bookings for the All-New Scorpio-N within 30 minutes of the booking commencement -- over 25,000 bookings within 1 minute -- translating into an ex-showroom value of nearly Rs 18,000 crore ($2.3 billion).
The company said the deliveries of the All-New Scorpio-N will begin September 26, 2022, onwards. Over 20,000 units of the All-New Scorpio-N are planned for delivery by December 2022 wherein Z8L variant will be prioritized. M&M had launched Scorpio-N on June 27 at an ex-showroom price of Rs 12 lakh-21.5 lakh – an introductory price applicable for only first 25,000 bookings.
While analysts at Axis Capital opine that there could be some duplication of bookings, and some cannibalization with XUV7oo, they are "positively surprised by strong customer response for Scorpio-N".
"We are a bit cautious and build in 60,000/ 72,000 units for both Scorpio models combined for FY23E/24E considering some cannibalization with XUV7oo. Overall, we are conservatively building in SUV volumes of 326,000/366,000 units for M&M in FY23/24E, resulting in 45 per cent/12 per cent year-on-year growth," it said.
In the last two years, this is the third consecutive successful SUV model launch by M&M after Thar and XUV7oo. M&M will continue to offer the existing model Scorpio Classic (3,000-4,000 monthly run-rate currently) as well and targets 8,000-10,000 volumes per month for both models combined.
"Back-to-back successful SUV launches in highly competitive segments should allay investor concerns on sustainability of company's SUV franchise. M&M continues to undergo significant makeover as witnessed from its sharper focus on large SUVs, efforts to scale up presence in electric vehicles (EVs) and larger ambitions in agri implements. Its capital allocation policy has come a long way from investing in unrelated segments and loss-making overseas auto businesses to monetization and exit from non-core businesses and getting external funding for EVs," Axis Capital said. The brokerage reiterates 'BUY' with a target of Rs 1,450.
For the month of July, analysts at Nomura expect M&M's utility vehicle (UV) volumes to rise 30 per cent YoY on a strong model cycle, and order book. It expects M&M's tractor volumes to be down 16 per cent YoY on a high base.