M&M shares hit a record high of 1,247 rupees. per share as they rose 7 per cent on Monday on the BSE, surpassing their previous high of Rs 1,192.55 set on July 20, 2022. The company on Saturday saw 100,000 bookings for the all-new Scorpio-N within 30 minutes of booking open – over 25,000 bookings within a minute – resulting in an ex-showroom value of almost Rs 18,000 crore ($2.3 billion).
The company announced that deliveries of the all-new Scorpio-N will begin on September 26, 2022. Over 20,000 units of the all-new Scorpio-N are slated to ship by December 2022, with the Z8L variant being prioritized. M&M launched Scorpio-N on June 27th at an ex-showroom price of Rs 12-21.5 lakh – an introductory price applicable only to the first 25,000 bookings.
While Analysts at Axis Capital think there may be some booking duplication and cannibalization at XUV7oo, they are “pleasantly surprised by the strong customer response for Scorpio-N.”
“We are being a bit cautious and are installing 60,000/72,000 units for both Scorpio models together for FY23E/24E, allowing for some cannibalization with XUV7oo. Overall, we are conservatively building SUV volumes of 326,000/366,000 units for M&M in FY23/24E, resulting in 45 percent/12 percent year-on-year growth,” it said.
This is M&M’s third successful SUV launch in the last two years, following Thar and XUV7oo. M&M will continue to offer the existing Scorpio Classic model (currently 3,000-4,000 monthly circulations) and is targeting 8,000-10,000 volumes per month for both models combined.
“Successive successful SUV launches in highly competitive segments should allay investor concerns about the sustainability of the company’s SUV franchise. M&M continues to be in the midst of a significant overhaul, as evidenced by its increased focus on large SUVs and efforts to expand its presence in electric vehicles (EVs) and greater ambitions in farm equipment. “Its capital allocation policy has come a long way from investing in unrelated segments and loss-making foreign auto companies to monetizing and exiting non-core businesses and sourcing external financing for electric vehicles,” said Axis Capital. The broker reiterates “BUY” with a target of Rs 1,450.
For the month of July, analysts at Nomura expect M&M’s commercial vehicle (UV) volumes to rise 30 percent year-on-year on a strong model cycle and backlog. M&M tractor volumes are expected to decline 16 percent year-on-year on a high basis.
Dear Reader,
Business Standard has endeavored to provide timely information and commentary on developments that are of interest to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback to improve what we offer has only strengthened our resolve and commitment to these ideals. Even during these trying times resulting from Covid-19, we remain committed to keeping you informed and informed with credible news, authoritative views and incisive commentary on timely and relevant issues.
However, we have a request.
As we fight the economic impact of the pandemic, we need your support even more so that we can continue to bring you higher quality content. Our subscription model has had an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve our goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are dedicated to.
Support quality journalism and Subscribe to Business Standard.
digital editor