Mahindra & Mahindra (M&M), a leading name in the Indian automotive and agricultural machinery sector, has reported a significant rise in its auto sales for September 2024. The company witnessed a 16% year-on-year (YoY) growth in auto sales, selling 87,839 units during the month. This growth occurs as the Indian auto industry recovers from pandemic-related disruptions, highlighting M&M’s robust market presence.
Alongside the rise in auto sales, M&M’s tractor sales also registered a modest 2% growth, reflecting steady demand in the agricultural sector. This growth in both industries has positively impacted M&M’s stock, which saw gains in response to the company’s strong performance.
M&M’s domestic Passenger Vehicle (PV) sales reached 51,062 units in September 2024, marking a 24% increase from the 41,267 units sold in the same month last year. In the utility vehicles segment, M&M sold a total of 52,590 units, which includes exports. Additionally, the company saw a 6% year-on-year (YoY) rise in Commercial Vehicle (CV) sales, with 33,750 units sold in September, up from 31,918. Source: Mint
The rise in auto and tractor sales, coupled with M&M’s focus on electric vehicles and sustainability, has boosted investor sentiment. The company’s stock saw gains as the market responded positively to its solid performance.
Automobile Sector Overview
India has a robust automotive market driven by both domestic demand and exports. In April 2024, the production of passenger vehicles, three-wheelers, two-wheelers, and quadricycles totaled 23,58,041 units. In FY23, automobile exports reached 47,61,487 units. The sector’s contribution to GDP has grown from 2.77% in 1992-1993 to around 7.1%. Source: Ibef.org
Key Drivers of Auto Sector Growth in India in 2024
The Indian auto sector experienced significant growth in 2024, driven by several key factors:
- Economic Recovery: India’s economic recovery post-pandemic fueled increased consumer spending, leading to higher demand for automobiles.
- Rising Disposable Income: A growing middle class with higher disposable incomes enabled more people to purchase vehicles.
- Government Incentives: Government initiatives like the Production-Linked Incentive (PLI) scheme attracted investments in the auto sector, boosting manufacturing and job creation.
- Infrastructure Development: Investments in road infrastructure and public transportation improved connectivity, making vehicles more accessible and convenient.
- Urbanization: India’s ongoing urbanization has led to increased demand for personal transportation, especially in cities with growing populations.
- Technological Advancements: Innovations in electric vehicles (EVs) and connected cars captured consumer interest and drove market growth.
- Export Market Expansion: India’s auto industry expanded its exports to global markets, contributing to overall growth.
India is poised to become a leader in shared mobility by 2030, offering opportunities for electric and autonomous vehicles. The focus is increasingly shifting towards electric vehicles to reduce emissions, with the Indian government committing to ensuring that 30% of new vehicle sales are electric by 2030.
Overview of M&M’s September Auto Sales Growth
Returning to M&M auto segment performance, the rise in sales can be attributed to the increasing demand for both passenger and commercial vehicles.
Key Highlights:
- Passenger Vehicles (PVs): The passenger vehicle segment saw impressive growth, driven by demand for M&M’s SUVs and electric vehicles (EVs). The launch of new models and variants, coupled with strong consumer interest in EVs, has significantly boosted sales.
- Commercial Vehicles (CVs): The commercial vehicle segment also contributed to the overall growth, with an increase in demand for M&M’s light commercial vehicles (LCVs) and heavy commercial vehicles (HCVs). Infrastructure development and economic recovery have spurred demand in this sector.
The overall auto industry in India has shown signs of recovery in 2024, and M&M’s strong performance in September highlights its ability to capitalize on this resurgence.
Financial Highlights of M&M Auto
| Market Cap in Crores (as of 1.10.24) | CMP (as of 1.10.24) | All-time High Level | PE Ratio | 1 Yr CAGR | ROCE |
| ₹ 3,93,857 | 3,167 | 3,222 | 35.6 | 99% | 13.6% |
Passenger Vehicle Sales: A Major Contributor to Growth
M&M’s passenger vehicle sales have been a significant driver of its overall growth in September. The company has been able to tap into the growing demand for SUVs, which has become a dominant segment in the Indian automotive market.
SUVs Leading the Way
M&M has been a pioneer in the SUV segment, and its models such as the Thar, XUV700, and Scorpio-N have continued to attract consumers. The SUV market in India has been expanding rapidly, with consumers preferring these vehicles for their comfort, safety features, and off-road capabilities.
M&M’s ability to consistently deliver high-quality SUVs with advanced technology and features has helped it maintain a competitive edge. The growing trend of electric SUVs has also benefited M&M, with its electric vehicle offerings gaining traction in the market.
Electric Vehicles: The Future of Mobility
M&M has made significant strides in the electric vehicle segment, positioning itself as a key player in India’s transition towards cleaner mobility solutions. The company’s focus on expanding its EV portfolio has resonated with environmentally conscious consumers, contributing to the rise in sales.
In September 2024, M&M’s EV sales saw a sharp increase, driven by models like the e-Verito and the recently launched XUV400 EV. The company’s efforts to enhance EV infrastructure, including charging stations, have further encouraged consumers to opt for electric mobility.
Light and Heavy Commercial Vehicles
M&M’s light commercial vehicles (LCVs) have witnessed strong demand, particularly in the e-commerce and logistics sectors. The increasing need for last-mile delivery solutions has driven demand for LCVs, and M&M’s offerings have been well-received in this space.
Heavy commercial vehicles (HCVs) have also seen a rebound in demand, supported by infrastructure projects and the revival of industries such as construction and manufacturing. M&M’s robust portfolio of HCVs, known for their durability and performance, has made them a preferred choice for businesses across various sectors.
Electric Commercial Vehicles: A Growing Segment
In line with its focus on sustainability, M&M has also been expanding its range of electric commercial vehicles. The company’s electric LCVs have gained popularity, especially among businesses looking to reduce their carbon footprint. This segment is expected to grow further as more companies adopt eco-friendly transportation solutions.
Tractor Sales: Modest Growth Reflects Steady Agricultural Demand
While M&M’s auto sales saw a remarkable 16% YoY growth, its tractor sales experienced a more modest 2% growth in September 2024. The tractor segment remains a crucial part of M&M’s business, given its leadership position in the Indian agricultural machinery market.
Factors Influencing Tractor Sales
The 2% growth in tractor sales can be attributed to a combination of factors, including a relatively stable monsoon season and steady demand from the agricultural sector. However, challenges such as fluctuating commodity prices and rural economic conditions have impacted growth in this segment.
Despite these challenges, M&M’s tractor sales remain strong, thanks to its diverse product offerings and widespread distribution network. The company’s tractors are known for their reliability and fuel efficiency, making them a popular choice among farmers across India.
Other Auto Stocks in Focus
Tata Motors
Financial Highlights
| Market Cap in Crores (as of 1.10.24) | CMP (as of 1.10.24) | All-time High Level | PE Ratio | 1 Yr CAGR | ROCE |
| ₹ 3,54,874 | ₹964 | ₹1,179 | 10.5 | 55% | 20.1% |
For the quarter ending June 2024, the company reported revenue of ₹108,048 crores, an increase from ₹102,236 crores in the same quarter the previous year. Additionally, the profit for the quarter surged to ₹5,692 crores, up from ₹3,301 crores in the corresponding period last year, reflecting a growth of 53%.
Maruti Suzuki India Limited
| Market Cap in Crores (as of 1.10.24) | CMP (as of 1.10.24) | All-time High Level | PE Ratio | 1 Yr CAGR | ROCE |
| ₹4,12,798 | ₹13,130 | ₹13,680 | 28.1 | 25% | 21.8% |
In the quarter ending June 2024, the company posted a revenue of ₹35,779 crores, up from ₹32,535 crores in the same quarter last year. The quarterly profit also saw a significant rise, reaching ₹3,760 crores compared to ₹2,543 crores in the previous year’s corresponding period, marking a 38.6% growth.
TVS Motor Company
| Market Cap in Crores (as of 1.10.24) | CMP (as of 1.10.24) | All-time High Level | PE Ratio | 1 Yr CAGR | ROCE |
| ₹1,34,154 | ₹2,831 | ₹2,958 | 78.5 | 87% | 14.7% |
In the quarter ending June 2024, the company recorded a revenue of ₹10,407 crores, an increase from ₹9,056 crores in the same quarter last year. The quarterly profit also rose significantly, reaching ₹485 crores compared to ₹441 crores in the corresponding period of the previous year, representing a growth of 9.5%.
Bajaj Auto
| Market Cap in Crores (as of 1.10.24) | CMP (as of 1.10.24) | All-time High Level | PE Ratio | 1 Yr CAGR | ROCE |
| ₹3,39,003 | ₹12,139 | ₹12,774 | 42.3 | 144% | 33.5% |
In the quarter ending June 2024, the company reported a revenue of ₹11,932 crores, an increase from ₹10,312 crores in the same quarter last year. The quarterly profit also experienced significant growth, rising to ₹1,942 crores from ₹1,644 crores in the corresponding period of the previous year, reflecting a 16% increase.
Conclusion
In 2024, the Indian automobile sector experienced remarkable growth, fueled by several factors such as economic recovery, rising disposable incomes, government incentives, and technological advancements. This performance was further enhanced by increased exports and a growing demand for electric vehicles.
Mahindra & Mahindra’s impressive 16% year-on-year growth in auto sales, along with a 2% rise in tractor sales in September 2024, underscores the company’s strong market position and its ability to navigate a competitive and evolving landscape. The company’s focus on innovation, sustainability, and an expanded product portfolio has driven sales, augmenting its stock performance.
As India continues to urbanize and modernize, the automotive sector may play a crucial role in the country’s economic development, presenting opportunities for growth, job creation, and technological innovation.
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FAQ
What factors contributed to Mahindra & Mahindra’s 16% YoY growth in auto sales in September 2024?
Mahindra’s impressive performance can be attributed to several factors. The company’s diverse product portfolio, ranging from SUVs and commercial vehicles to tractors, has allowed it to cater to a wide range of customer needs. Additionally, Mahindra’s focus on innovation, particularly in electric vehicles and connected technology, has positioned it as a leader in the industry. The company’s commitment to sustainability, including investments in renewable energy, has also resonated with environmentally conscious consumers.
How has the overall automobile sector in India performed in 2024?
The Indian automobile sector has experienced significant growth in 2024, driven by several factors. A strong economic recovery, rising disposable incomes, and government incentives have fueled increased demand for vehicles. Moreover, advancements in technology, such as electric vehicles and connected car features, have attracted new customers. The sector’s growth has been instrumental in India’s economic development, creating jobs and fostering innovation.
What are the key trends shaping the Indian automobile market?
The Indian automobile market is undergoing significant transformation, with several key trends emerging. The shift towards electric vehicles is gaining momentum, driven by government policies and growing consumer interest. Advancements in connected car technology are enhancing the driving experience and creating new business opportunities. The increasing demand for SUVs and premium vehicles reflects changing consumer preferences. Finally, the focus on sustainability is driving investments in green technologies and sustainable manufacturing practices.
How does M&M Auto’s growth compare to that of other automakers in India?
Mahindra & Mahindra has outperformed many of its competitors in terms of sales growth and stock performance in 2024. The company’s strong market position, diversified product portfolio, and focus on innovation have contributed to its success. However, the competitive landscape in the Indian automobile market remains intense, and Mahindra will need to continue to adapt and innovate to maintain its leadership position.
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