BackMahindra Scorpio N launch a 'blockbuster': Brokerage bullish on M&M shares, raises target price
Mahindra Scorpio N can become major volume driver for the company going forward, as per the brokerage
PremiumMahindra & Mahindra (M&M) on Monday launched the much awaited Scorpio N, priced at ₹11.99 -19.5 lakh (ex-showroom) in five variants across seven colors. Scorpio N is likely to open for booking on 30th July, 2022 while delivery is expected start during festive period.
“Given the refreshing stylish look, additional best in class features and attractive price compared to peers, Scorpio N has a potential to create ‘wow’ factor for itself. We believe, Scorpio N is likely to become next XUV700 phenomenon for M&M and can become major volume driver for the company going forward," said brokerage IDBI Capital in a note.
Calling the Scorpio N a third Blockbuster from M&M, the brokerage said it has Buy rating on M&M shares and has raised its target price to ₹1,643 apiece, more than 47% upside potential over the next 18 months. Mahindra and Mahindra shares have rallied over 34% in 2022 (YTD) so far.
To factor in strong response to its existing models and similar response to Mahindra Scorpio N, the brokerage house has increased its volume and PAT estimates by 4% and 8.3% respectively for FY24 respectively.
Built on new third generation body on frame platform, new Mahindra Scorpio N is completely newly developed product with no carryover components of the existing Scorpio. It is powered by a 2.0-litre mStallion turbo petrol engine/ 2.2-litre mHawk diesel engine, IDBI Capital highlighted.
Its prominent features include an 8-inch touchscreen, a sunroof, Alexa Voice Command, 3D immersive Sony sound system and up to six airbags. The Scorpio N has the lowest CO2 emission in the segment. M&M has incurred overall investment of ₹16 bn for development of Scorpio N which includes setting up automated manufacturing line.
The all-new Scorpio-N will be competing with other vehicles in the segment such as Tata Safari, Hyundai Creta, Toyota Fortuner, among others. SUV, or the sports utility vehicle, are becoming the car of choice across consumer classes and geographies as well as for manufacturers for business growth. Currently, competitive intensity in the compact SUV segment is very high as compared to FY2017.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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