05 Jun , 2025 By : Debdeep Gupta
Shares of Mahindra & Mahindra rose 1 percent to Rs 3,081 in morning trade on June 5 as its electric vehicle journey may be headed for a profitability inflexion point, according to HSBC Global Research. The stock has now risen for the fourth straight session.
The brokerage has reiterated a bullish view on the automaker, backed by improving economics in its EV segment and broader growth triggers across its portfolio. Analysts have assigned a price target of Rs 3,470, implying an upside potential of 14 percent from the last close.
HSBC expects the company’s electric vehicle margins to climb into mid-single digits over the next 12 to 18 months—bringing them closer to those of its internal combustion engine (ICE) vehicles. It sees government incentives, particularly through the Production Linked Incentive (PLI) scheme, playing a critical role in supporting this shift.
A key milestone has already been crossed. In the March quarter, M&M’s EV operations came close to breakeven at the EBITDA level, selling nearly 3,000 units. HSBC believes this is just the beginning. If monthly EV volumes can reach between 4,000 and 5,000 units, margin expansion could surprise on the upside.
The tax advantage for EVs in India is another lever working in M&M’s favour. HSBC estimates that lower taxes currently provide an implicit subsidy of nearly Rs 9 lakh per vehicle, helping absorb the higher input costs typically associated with EV manufacturing. However, the report cautions that this benefit may taper off as the segment matures and tax structures normalize. Even so, cost dynamics could remain favourable, as battery prices decline and ICE vehicles get more expensive under stricter emission norms.
But M&M’s growth story isn’t riding solely on EVs. HSBC also points to rising momentum in tractors and utility vehicles. Analysts tracking the company are pencilling in a 7 percent uptick in tractor volumes for FY26, while SUV sales are expected to average around 50,000 units per month, with room for surprises.
The Thar-maker reported a 17 percent year-on-year increase in May, selling over 84,110 vehicles across domestic and export markets. The company sold over 52,000 SUVs in May, marking a 21 percent rise compared with the same month last year. Including exports, as many as 54,819 units were sold during the month. Commercial vehicle sales showed a mixed trend in May, with a 14 percent rise in light commercial vehicles, also known as the 2–3.5 tonne segment, offset by an 18 percent drop in the sub-2 tonne category, the company said in a regulatory filing.
M&M shares are up 12 percent in the last three months.
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