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Business Overview: MM is a leading player in India's automotive and farm equipment sectors, with a strong presence in SUVs, tractors, and electric vehicles, supported by the launch of new EV models. The company benefits from strong brand equity, an extensive distribution network, and tech-driven mobility solutions. In FY24, MM reported revenue of INR 990Bn with an EBITDA margin of 13.3%. Revenue is expected to grow at a CAGR of 19.3% from FY25 to FY27, with a 100 bps margin improvement, driven by sustained rural demand, an expanding EV portfolio, and global market expansion.

Can MM sustain its market share in MUV segment or emerge as the market leader?

MM has demonstrated impressive growth, with a CAGR of 43% from FY21 to FY24, reaching 4,70,758 units. Its MUV market share has consistently increased, from 13.5% in FY21 to 21.4% in Q3FY25 , indicating a strong upward trajectory. However, MSIL has outpaced MM with a 44.5% CAGR, reaching 7,20,223 units in the same period. Additionally, MSIL market share has surged from 19.9% in FY21 to 33.9% in Q3FY25 , significantly higher than MM’s. While MM is sustaining its market share growth, emerging as the market leader seems challenging given MSIL superior volume and market share expansion

Is MM’s farm equipment market share growing, and can it maintain its leadership?

MM has steadily increased its market share from 38.2% in FY21 to 44.2% in Q3FY25, showcasing consistent growth. With its closest competitor, Sonalika International, holding less than 15% market share, M&M faces no immediate threat to its leadership. The widening gap indicates MM’s dominance in the sector is only strengthening, supported by its strong product portfolio and market reach. MM’s revenue share from the Farm Equipment segment (FEM) stands at 21.1%, ensuring a stable contribution to its overall revenue.

Will Trump’s tariffs impact MM's growth and market position?

While tariffs could impact the broader auto industry, MM is unlikely to face significant challenges. Its export share is relatively low, accounting for only 3% of total auto sales and 3.7% in the farm equipment segment in FY24. Additionally, MM's key export markets—Australia, New Zealand, and South & Central America—are not directly affected by U.S. tariffs, minimizing any major impact on its growth and operations.

Will MM’s new EV launches significantly impact its overall passenger vehicle sales?

MM’s EV sales were 1.7% of total volumes in FY24 (8,025 out of 4,59,877 units). With the launch of BE 6E and XE 9E, we expect the company to sell 3,500 to 4,000 units per month, driving EV penetration to 6-8% of total SUV volumes by FY27. This marks a strong push toward EV adoption, positioning MM for significant growth in the premium EV space.

What makes MM a standout investment in India's automobile industry?

MM has strengthened its position in the Indian auto industry with consistent market share gains across key segments. As of Q3FY25, the company has expanded its SUV market share to 21.4% in, capitalizing on the rising demand for utility vehicles. In the commercial segment, MM leads with a 45.5% market share in LCVs, reinforcing its dominance in freight and logistics. Additionally, MM’s tractor market share has reached an all-time high of 44.2%, highlighting its stronghold in the rural and agricultural sector. With a well-diversified portfolio across high-growth categories, MM is well-positioned to sustain its growth momentum and capitalize on evolving consumer preferences.

Recommendation : We maintain a positive outlook on MM, maintaining our ‘BUY’ rating, with a TP of INR 3,790.

Key Risks:

* Supply chain risk – Dependence on specific raw materials, semiconductors, and critical components can lead to delays and cost overruns due to global shortages or trade restrictions.

* Competition risk – Increasing competition from EV manufacturers, tech-driven mobility startups, and global automakers intensifies pricing pressure and the need for continuous innovation.

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