M&M Overtakes Tata Motors Briefly, Claims Second Spot in Market Cap

According to Bloomberg data, M&M's market capitalization temporarily surpassed that of Tata Motors, making it India's second most valuable automobile company.

On the day of the Mahindra group's scheduled Investor Day, automotive giant M&M emerged as the top gainer on the Sensex. Year-to-date, Tata Motors shares have increased by 25 percent, whereas M&M share price have surged by an impressive 70 percent.

During its Investor Day presentation, the car company announced plans to launch six new SUVs and a total of 23 new vehicles by 2030. Additionally, M&M aims to introduce seven Born Electric vehicles by the end of the decade.

Based on FY24 volumes, the company ranks as the world's largest tractor manufacturer and has set ambitious plans to expand both domestically and internationally. Over the past 15 years, India's tractor segment has experienced a CAGR of 7.3 percent, and the company sees substantial potential for further growth.

The M&M Investor Day presentation revealed that the company plans to implement a total capital expenditure of Rs 27,000 crore between FY25 and FY27. Investors have been very bullish on M&M stock given its promising growth outlook and a potential recovery in the farm equipment business for FY25.

For the month of May, Mahindra & Mahindra's total sales surged to 71,682 vehicles, a substantial 17 percent rise over the corresponding period last year, inclusive of exports.

At the end of May, brokerage firm Bank of America Securities upgraded its rating for M&M shares to 'buy,' highlighting the automaker's multiple growth drivers. BoFA was also the first brokerage to predict that the stock would exceed the Rs 3,000-mark within the next 12 months, setting a price target of Rs 3,050 for M&M. 

Considering these factors, it's unsurprising that M&M shares are approaching that target, reaching a record high of Rs 2,946 in trading today. 

BoFA Securities expects several growth catalysts for Mahindra & Mahindra (M&M) to materialize over the next 12-18 months. The brokerage is optimistic about M&M's core business, supported by market share gains in the SUV segment and a potential recovery in the tractor business. 

By the end of FY24, M&M's SUV market share had increased by 130 basis points to 20.4 percent, while its share in the light commercial vehicles segment grew by 350 basis points to 49 percent. In the tractor segment, M&M also gained 40 basis points, achieving a market share of 41.6 percent. 

BoFA Securities also emphasized the promising future contributions from M&M's subsidiaries, noting the company's strong management, ambitious growth strategies, and commitment to sustainability as key positive factors.