Target: ₹2,700

CMP: ₹2,903.15

We attended Mahindra & Mahindra’s analyst meet, held pursuant to the SML Isuzu acquisition.

M&M has acquired about 59 per cent stake in SML Isuzu from existing promoters Sumitomo Corporation and Isuzu Motors for a cash consideration of ₹550 crore, with a further open offer for 26 per cent stake. Through this acquisition, M&M aims to strengthen its +3.5ton CV presence (about 3 per cent market share vs around 52 per cent in the under-3.5ton LCVs) and doubling its share to 6 per cent immediately, with a target to reach 10–12 per cent by FY31 and to more than 20 per cent by FY36.

Besides enhancing its market positioning, M&M expects synergies across costs, network, platforms and brand. However, the financial impact remains limited, with less than 2 per cent revenue and around 1 per cent EBITDA/PAT addition on a pro forma basis. The company targets completing the acquisition by Dec-25.

Amid a muted PV industry demand outlook, visibility for M&M also remains limited, with the ICE SUV product launch cycle now largely behind. Further, while the acquisition reflects M&M’s continued focus on value-accretive capital allocation, and unlocks synergies across parameters, the financial impact remains limited, with about 2 per cent revenue and around 1 per cent EBITDA/PAT addition on a pro forma basis.

We maintain Add with unchanged SoTP-based TP of ₹2,700.

Published on April 29, 2025