Target: ₹1,314

CMP: ₹1,111

Mahindra & Mahindra (MM) has launched the Scorpio N, with a price of ₹11.99 lakh for entry-level petrol MT, going up to ₹19.49 lakh for the top specification diesel MT variant. . It would be manufactured at Chakan, Pune. The development and engineering of the Scorpio N is the outcome of an overall investment of ₹1,600 crore.

We believe MM can gain sustained market share as the recently-launched Thar and XUV 700 are better products attracting a new set of urban customers. Further, the refreshed models — Bolero Neo, the Scorpio N and the upcoming Bolero Neo Plus should help revive share for flagship brands. The current order-book stands at 1.7 lakh units.

We expect FY23 volume for the tractor industry to rise 8 per cent, despite June 2022 expected to be double-digit decline (Q1 still at life-high volumes). We expect the automotive segment to post a 23 per cent volume CAGR over FY22-24, given cyclical recovery and expected market share gains in the UV segment In our view, ramp-up of UV volume post easing of the chip shortage would be a key trigger for the stock and we would monitor sustenance of demand, given dual bookings in the industry. With MM subsidiary losses reducing and investments under control, we believe the company’s capital allocation policies are on track.

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