Mahindra & Mahindra unit launches two new electric SUVs; share rises 3%

M&M share price: Shares of automobile giant Mahindra and Mahindra (M&M) were buzzing in trade on Wednesday, November 27, 2024, as the scrip rose up to 2.74 per cent to hit an intraday high of Rs 3,070 per share. M&M is also among the top gainers on BSE.

 

However, at 10:10 AM, M&M shares were off highs, and were trading 0.98 per cent higher at Rs 3,017 per share. In comparison, BSE Sensex was trading flat with a positive bias at 80,009.82 levels.

 

The uptick in the M&M share price came after the company announced that its subsidiary, Mahindra Electric Automobile Limited (MEAL), has launched two new electric Sports Utility Vehicles (SUVs): the XEV 9e and BE 6e.

 

 

The company revealed plans to establish a manufacturing capacity of 90,000 vehicles annually at its Automotive Division in Chakan, in collaboration with MEAL. The capacity will be developed in phases and is expected to be operational by March 2025, it added. 

 

M&M also highlighted that Rs 4,500 crore of its total Rs 16,000 crore investment for the FY22-FY27 cycle is earmarked for this project. The allocation includes the development of powertrains, two product designs incorporating advanced software and technology, and expanded manufacturing capacity.

 

What do analysts say? 

 

Analysts at Motilal Oswal lauded the innovative features and competitive pricing of the new models, calling them a strong value proposition. However, they noted that the lack of sufficient charging infrastructure could limit the immediate uptake of these vehicles. “While the pricing is attractive, the segment's incremental volume growth in the near term remains uncertain,” they stated.

 

Motilal Oswal projects a compound annual growth rate (CAGR) of approximately 13 per cent in revenue, 16 per cent in earnings before interest, tax, depreciation and amortisation (Ebitda), and 15.5 per cent in profit after tax (PAT) for M&M over FY24–FY27. The company has already surpassed its target of an 18 per cent return on equity (RoE) in FY24 and aims to maintain this benchmark. The analysts maintain a ‘Buy’ rating on M&M, with a target price of Rs 3,420, based on a sum-of-the-parts (SOTP) valuation for September 2026.

 

Those at Nuvama said, BE.6e and XEV.9E models are based on a new dedicated EV platform that scores over peers on features, but has been priced competitively. 

 

Hence, they have factored in battery electric vehicle (BEV) volumes of 48,000 units for FY26 in their projections. With expectations of a 15 per cent CAGR in revenue and 18 per cent in core earnings for FY24–FY27, analysts at Nuvama predict a sustained return on invested capital (RoIC) of over 45 per cent. Therefore, analysts have maintained a ‘Buy’ rating, with a target price of Rs 3,700.

 

About XEV 9e and BE 6e 

 

The XUV 9e and BE 6e were launched at the Mahindra Research Valley in Chengalpattu. These vehicles are built on the innovative INGLO platform, marking the company's foray into "born-electric" architecture. Equipped with a 79 kWh lithium iron phosphate battery, both SUVs boast a real-world range of over 500 km on a single charge. The battery supports fast DC charging of up to 175 kW, enabling a 20% to 80% charge in just 20 minutes.

 

The XUV 9e measures approximately 4,789 mm in length, while the BE 6e is slightly shorter at 4,371 mm. READ MORE

 

“The BE 6e, with its edgy, athletic silhouette and race-inspired agility, is designed for those who thrive on performance and adrenaline while the XEV 9e exudes sophistication with its suave SUV coupe design, seamlessly blending indulgent luxury with dynamic performance,” said Veejay Nakra, president of automotive sector at Mahindra & Mahindra Ltd. and joint managing director of Mahindra Electric Automobile Limited.