Goal: ₹2,700
CMP: ₹2,903.15
We attended Mahindra & Mahindra’s analyst meet, held pursuant to the SML Isuzu acquisition.
M&M has acquired about 59 per cent stake in SML Isuzu from present promoters Sumitomo Company and Isuzu Motors for a money consideration of ₹550 crore, with an extra open supply for 26 per cent stake. By this acquisition, M&M goals to strengthen its +3.5ton CV presence (about 3 per cent market share vs round 52 per cent within the under-3.5ton LCVs) and doubling its share to six per cent instantly, with a goal to succeed in 10–12 per cent by FY31 and to greater than 20 per cent by FY36.
Apart from enhancing its market positioning, M&M expects synergies throughout prices, community, platforms and model. Nevertheless, the monetary influence stays restricted, with lower than 2 per cent income and round 1 per cent EBITDA/PAT addition on a professional forma foundation. The corporate targets finishing the acquisition by Dec-25.
Amid a muted PV business demand outlook, visibility for M&M additionally stays restricted, with the ICE SUV product launch cycle now largely behind. Additional, whereas the acquisition displays M&M’s continued concentrate on value-accretive capital allocation, and unlocks synergies throughout parameters, the monetary influence stays restricted, with about 2 per cent income and round 1 per cent EBITDA/PAT addition on a professional forma foundation.
We keep Add with unchanged SoTP-based TP of ₹2,700.
Printed on April 29, 2025
