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    After XUV400, more SUVs may follow on Mahindra's Inglo platform, says CLSA

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    After XUV400, more SUVs may follow on Mahindra's Inglo platform, says CLSA

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    M&M unveiled its first electric SUV, the XUV400 last week with several best-in-class features to take on the likes of Tata’s Nexon EV.  According to the brokerage firm, the design philosophy of the InGlo platform can make EV models from M&M have class-leading features like in the XUV400.

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    Buy / Sell M&M share

    Global brokerage firm CLSA has maintained a ‘buy’ call on the shares of Mahindra and Mahindra (M&M) with a reverse target price of  Rs 1,567 from Rs 1,498 earlier on increased valuations in volume and margins for the UV and CV businesses. 
    “We increased our volume forecast for the passenger vehicle (PV) and light commercial vehicle (LCV) business leading to a 3 percent to 5 percent increase in our earnings assumptions for FY23/24. Thus we lift our target price from Rs1,498 to Rs1,567 and retain our BUY rating,”  said CLSA in a note. 
    FY23 (Estimate)FY24 (Estimate)
    Total volumes (K units)1,0351,204
    M&M unveiled its first electric SUV, the XUV400 last week with several best-in-class features to take on the likes of Tata’s Nexon EV.  According to the brokerage firm, the design philosophy of the InGlo platform can make EV models from M&M have class-leading features like in the XUV400.
    “We estimate the company to sell 126k electric SUVs by FY27, forming 25 percent of its overall SUV volume and 20 percent of the overall electric market in India,” said CLSA. 
    FY21FY22FY23(E)FY24(E)FY25(E)FY30(E)FY50(E) 
    Total Revenue from SUV (Rs mn) 859,81,228,9391,482,561,739,541,969,443,637,8025,584,5
    EV mix in SUV (%)0.72.14.05.29.14060
    CLSA also noted that the key risks for Mahindra and Mahindra can be delayed recovery in the tractor business, failure of new SUV models, increased competitive intensity in its key segments, and an increase in non-core investments.
    Shares of Mahindra and Mahindra closed in the green on the BSE today quoting at Rs 1,299, up by 0.15 percent from the previous close on the BSE. The stock has corrected 2 percent in the last 3 days but the return so far this year is more than 56 percent.
    In its monthly sales report, Mahindra & Mahindra (M&M) announced that the company's total production of automobiles soared 82.87 percent to 60,751 units in August 2022 as compared with 33,220 units sold in the corresponding period a year ago. The automobile major's total sales zoomed 104.84 percent to 56,137 units in August 2022 as against 27,405 units sold in August 2021.
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    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
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