M&M shares gain 4% as bookings for All-New Thar SUV cross 9,000 mark

Shares of Mahindra & Mahindra (M&M) moved higher by 4 per cent to Rs 633 on the BSE in the intra-day trade on Tuesday after the company’s All-New Thar crossed 9,000 bookings in four days. The stock of cars and utility vehicles company was the second highest gainer among S&P BSE Sensex, which was up 0.76 per cent at 39,296 points at 11:50 am.

“The company’s legendary SUV, the All-New Thar has already crossed 9,000 bookings, since its launch on October 2, 2020. This, despite only 18 cities being part of phase one markets where test drive and demo vehicles are available,” M&M said in a press release today.

The All-New Thar becomes the only SUV in the 4X4 lifestyle category to record this booking milestone in such a short span of time, it said. The company further said test drives for All-New Thar has begun in phases, starting with 18 cities. The company will add 100 more cities on October 10, 2020, and test drives for the rest of the county will be available from October 15, 2020.

Motilal Oswal Securities believes the new ‘Thar’ has the capability to lure fan base customers that were earlier shying away because of its technical inferiority. While expanding its base to new customers, it could also take some customers from other UV players due to its off-road + SUV capability, which other players hardly offer.

“M&M is the best proxy on rural recovery in the auto segment with a strong footing in the tractor and LCV business. On the UV side, the ‘Thar’ might give some relief to M&M from the increasing competitive intensity in the fast-growing SUV segment. The company has several other upgrades and new launches lined-up, such as e-KUV100, new XUV500, new Scorpio, and e-XUV300,” the brokerage firm said in a stock update. It maintains a ‘buy’ rating on the stock with a target price of Rs 735 per share.

Meanwhile, the stock of M&M hit a 52-week high of Rs 666 on September 21, 2020. Despite today’s 4 per cent gain, in the past one month, the stock has underperformed the market by falling 1 per cent, against a 2.4 per cent rise in the Sensex.