Motilal Oswal bullish on M&M's healthy launch pipeline; retains 'Buy'

Motilal Oswal expects M&M to deliver a 14 per cent underlying volume (UV) compound annual growth rate (CAGR) over FY25-FY28E.

Mahindra & Mahindra’s (M&M) latest launches—XUV7XO and the XEV 9S—could help sustain demand momentum, believes Motilal Oswal Financial Services, while reiterating a ‘Buy’ rating and a target price of ₹4,521. 

 

Following test drives of both models, the brokerage said the XUV7XO brings meaningful upgrades over the earlier variant, including best-in-class suspension, a three-screen display layout, ambient lighting, upgraded advanced driver assistance system (ADAS), a stronger electronics and computing stack, Dolby Vision with Dolby Atmos, a 16-speaker Harman Kardon audio system, and improved seating comfort.

XUV7XO could lift XUV700 run-rate by 2,000–3,000 units a month

With an introductory price offer available for the first 40,000 customers, the brokerage believes the XUV7XO is a stronger value proposition and can potentially add 2,000–3,000 incremental units to the monthly run-rate of the XUV700.

 

XEV 9S: EV variant of XUV700, but not a major volume driver

M&M has also launched the XEV 9S, positioned as the EV version of the XUV700, priced at ₹19.9 lakh to ₹29.4 lakh (ex-showroom). While the interior layout is largely similar to the ICE model, the XEV 9S gets semi-active suspension that adapts to road conditions and an augmented-reality (AR) heads-up display. However, the brokerage does not expect the XEV 9S to be a key growth driver due to its premium pricing.  ALSO READ | B&K starts 'Buy' on Travel Food Services; sees 34% upside potential

Healthy launch pipeline through FY27

The brokerage noted that M&M has launched three models in recent days: the XUV7XO (a material refresh of XUV700 with marginal cost increase), the XEV 9S, and the EV variant of XUV 3XO. Beyond these, the company plans to introduce two more ICE variants in FY27, along with another EV in the same fiscal year, which is expected to keep the product cycle supportive.

Outlook

The brokerage expects M&M to deliver a 14 per cent underlying volume (UV) compound annual growth rate (CAGR) over FY25–FY28E. It estimates the company’s revenue/Earnings before interest, tax, depreciation and amortisation (Ebitda)/ profit after tax (PAT) to grow at a CAGR of around 19 per cent/18 per cent /21 per cent over the same period, aided by multiple long-term growth drivers and a steady stream of launches.

 

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