Analyst Concall
M&M to raise EV play, focus on improving infrastructure
This story was originally published at 18:10 IST on 7 February 2025
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--M&M: Tractor industry expected to grow by 15% in Jan-Mar
--CONTEXT: Comments by M&M's management in post-earnings analyst concall
--M&M: Booking for new electric SUVs to begin from Feb 14
--M&M: Margins of EVs relatively lower than fossil fuel based vehicles
--M&M: Integration of Swaraj brand aided growth of tractor segment
--M&M: To aim for more market share gains in tractors going forward
--M&M: To increase manufacturing capacity for XUV 3XO, Thar Roxx by July
--M&M: Demand for XUV 3XO in South Africa robust
By Narayana Krishna and Akshay V. Johnson
HYDERABAD/MUMBAI - With bookings set to open for its new electric luxury sport utility vehicle, Mahindra & Mahindra Ltd. plans to focus more on improving the supporting infrastructure, including charging and service facilities, the management said Friday in a post-earnings conference call with analysts.
Bookings for the electric luxury sport utility vehicle Origin are set to begin on Feb.14, Valentine's Day, across the country through 250 select dealerships, the management said. With a range of 500 km on a single charge, the new electric vehicle is expected to transform the market dynamics, according to the management.
The company said that going by the response to its marketing campaigns, it expects a large pool of new customers to buy the new electric vehicle. According to Mahindra & Mahindra's earlier announcements, Origin is expected to come with nine variants.
"We are selling this (new Origin electric vehicle) as a lifestyle SUV statement, what we may call objects of desire, based on three primary bases of differentiation," the management said. "One is the design, second is the HMI or intuitive human machine interface that you would see, and third is its high-tech features."
The company is changing its financial reporting structure for its electric vehicles business from Jan-Mar to bring more transparency in operations and provide greater clarity on margins. Mahindra & Mahindra will act as contract manufacturer by charging a conversion fee, while core electric vehicle financials will be on the books of subsidiary Mahindra Electric Automobile Ltd., the company said.
The company said margins for electric vehicles are lower than for vehicles powered by conventional internal combustion engines and its subsidiary Mahindra Electric Automobile may see some losses initially due to changes in the reporting structure. But the idea is to provide clarity on the growth of the core automobiles business and updates on the electric vehicles business with transparency, it said.
CAPACITY EXPANSION
Considering the robust demand and long waiting periods, Mahindra & Mahindra plans to increase its production capacity for the XUV 3XO and Thar Roxx vehicles by July, the management said. At present, the company makes 9,000 units of the XUV 3XO a month, while the Thar Roxx capacity is around 9,500 units a month. It plans to add 1,500-2,000 units per month of additional production capacity for each by extending the existing production lines, the management said.
Mahindra & Mahindra said the demand for the XUV 3XO in South Africa is good and the company is facing capacity constraints to meet the demand from that country.
The company said the tractor industry is expected to see 15% growth in Jan-Mar and around 7% for the financial year 2024-25 (Apr-Mar). The company is working on increasing its market share in the tractors business and plans to revise its marketing targets. It said the integration of the Swaraj brand was one of the reasons for its growth in the tractor business. For Oct-Dec, Mahindra & Mahindra reported a market share of 44.2%, an improvement of 200 basis points.
Shares of M&M closed at INR 3,198.45 Friday, up 1.9%, on the National Stock Exchange. The company detailed its December quarter results during market hours. End
Edited by Rajeev Pai
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