M&M outshines Tata Motors to become India’s second-largest auto major; shares hit fresh 52-week high

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Mahindra & Mahindra (M&M) is now India’s second-largest automaker after overtaking Tata Motors in terms of market capitalisation (mcap) earlier today. M&M shares hit three per cent upper circuit at a fresh 52-week high on the robust momentum. With an mcap of 3,63,980.89 crore, M&M is now the second-most valuable auto manufacturer after Maruti Suzuki, which dominates the top spot with an mcap of 4,03,240.17 crore, according to BSE data.

Rising for the second consecutive session on Friday, June 14, M&M emerged as the top Sensex gainer in trade by market closing. Based on FY24 volumes, M&M is the world’s largest tractor maker, and has laid out plans to scale up in the domestic as well as the overseas market, according to M&M’s investor day presentation.

M&M shares at all-time high: What’s behind the bullish momentum?

The stock surged during today’s session as the auto manufacturer said it plans to beat the industry’s average revenue growth by fiscal 2027. M&M also plans to increase its earnings before interest and tax margin by 15 per cent and achieve a return on capital employed of more than 30 per cent. In its investor presentation, M&M also said that it intends to rollout a total capex of 27,000 crore between FY25-27. 

In the automobile vertical, the company plans to capitalise on its market leadership in internal combustion engines, electric vehicles (EVs), commercial vehicles, and international markets. M&M also plans to introduce six new SUVs by 2030, and a total of 23 launches by 2030, along with seven Born EVs by end of the decade. M&M boasts of SUVs such as Thar, ScorpioN, and Bolero.
 

M&M Share Price Trend

On Friday, shares of M&M opened at 2,870.25 and gained almost three per cent to hit a fresh 52-week high of 2,945.00 before settling 2.20 per cent higher at 2,927 apiece on the BSE. M&M shares have risen almost 70 per cent on a year-to-date (YTD) basis and 112 per cent in the last 12 months. The Nifty auto index has surged by over 75 per cent in the last one year and gained 38 per cent on a YTD basis.

M&M has given multi-bagger returns to investors over the last one-year period. In the last one yar, M&M has given 113.28 per cent returns to investors against Nifty 50’s 25.38 per cent and Sensex annual returns of 21.93 per cent, according to Trendlyne data. On a YTD basis, M&M returns stand at 72 per cent.

 

M&M Q4 Results

M&M reported a net profit of 2,038.21 crore in the fourth quarter of FY24, registering a growth of 31.6 per cent from 1,548.97 crore in the year-ago period. The auto major’s revenue from operations in the January-March quarter increased 11.24 per cent to 25,108.97 crore from 22,571.37 crore, year-on-year (YoY).

At the operational front, earnings before interest, taxes, depreciation and amortization (EBITDA) in the March quarter rose 12 per cent YoY to 3,119 crore from 2,789 crore, while EBITDA margin remained flat at 12.4 per cent.

The board of directors of M&M recommended a dividend of 21.10 per share equity share, or 422 per cent, of the face value of 5 each. The record date for the dividend is July 5, 2024, and the dividend will be paid after July 31, 2024.

For the month of May, Mahindra & Mahindra’s total sales surged to 71,682 vehicles, a substantial 17 per cent rise over the corresponding period last year, inclusive of exports. By the end of FY24, M&M’s SUV market share rose by 130 basis points to 20.4 per cent, while its share in the light commercial vehicles segment increased by 350 basis points to 49 per cent.

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Published: 14 Jun 2024, 06:48 PM IST

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