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View – Roxx should double up Thar portfolio volumes for M&M

We believe, Thar Roxx launch comes as more practical offering while carrying the lifestyle offroader appeal of Thar 3 door. The product do offer clear distinction, Roxx to cannibalize Thar 3 door to some extent while will get additional customers from mid SUV segment given price overlap with better features on offer. MM continues to enjoy a strong order backlog of ~178k units (vs. ~220k units in 4QFY24) of which Thar is ~42k units and launch of Thar Roxx should further build on the same. MM’s recently unveiled XUV 3XO has seen a healthy response. MM will continue to have a healthy launch pipeline as it targets to launch 9 ICE SUVs (includes 6 new launches and 3 midcycle upgrades), 7 BEVs and 7 LCVs by 2030. Driven by a strong order backlog and new launches, we expect MM to continue outperforming industry growth even in FY25E. We are building in SUV volume CAGR of 18.6% over FY24-26E with overall revenue/EBITDA/Adj.PAT CAGR of 13.5%/21%/16.3%. We maintain ADD with TP at 3,347 as MM trades at implied core PE of 24.6x/21.1x FY25E/FY26E EPS.

Key highlights (PR and PPT Link)

Roxx built on new platform with capex of Rs10b - The product is extended version of Thar 3 door and uses the same engine configuration, its build on all new GLYDE platform with capex of ~Rs10b.

Key premium features on base variant make Roxx more aspirational - MM’s strategy of bring in premium features to mass/affordable segment accentuated further with entry level (MX1) product is equipped with host of premium features. Some of the notable one includes, 10.25-inch touchscreen (for better infotainment), LED lighting, a dual-tone exterior finish, 18-inch steel wheels (for premium touch) and six airbags, ESC and three-point seat belts for all passengers (for safety aspects).

Diverse price range coverage to get volumes from rivals - While co is yet to declare prices of certain trims, we believe pricing is diverse with, 1) entry MX1 variant is priced at Rs12.99 lakh (G MT RWD) and Rs13.99 lakh (D MT RWD), 2) for affordability yet premium, MX3 is priced at Rs14.99 lakh (G AT RWD) and Rs 15.99 lakh (D MT RWD), premium AC7L/AX5L models are priced at Rs18.99 lakh each, while the MX5/AX3L versions come in at Rs 16.99 lakh. We believe yet to be announced AX7L it would be in the range of Rs21-23 lakh.

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