Mahindra & Mahindra’s inventory worth has corrected ~15% prior to now two weeks vs the Nifty which was down ~3%, largely after information flows of Tesla coming into India, with a diminished responsibility construction. Opposite to information circulation, we consider Tesla is extra more likely to enter the nation with the pricier Mannequin Y and never even the Mannequin 3, go away alone the but to be launched Mannequin 2.
Tesla costs in India are more likely to be ~4x+ common promoting costs of automobiles at the moment and ~2x over the following 5 years if the Mannequin 2 is launched. Within the EU, the US and China, this ratio at the moment is ~1.0-1.5x;
Tesla’s BEV market share is 10-15% within the EU & China and ~44% within the US. This interprets to PV market share of lower than 5% in these areas. “If we had been to imagine a 10-15% market share in BEV in India by FY30E, Tesla would garner a mere ~1.5-2.0% share of PV for 15% BEV penetration in base case and three.0-4.5% for ~30% BEV penetration in a bull case,” mentioned Elara Securities.
Revise to Purchase with an unchanged TP of INR 3,654: Given ~15% inventory worth response prior to now two weeks, we revise to Purchase from Accumulate with an unchanged SOTP-based TP of INR 3,654. The inventory is buying and selling at ~11.9x FY27E EV/ EBITDA (ex of subsidiary), cheaper than Maruti Suzuki’s 12.5x. Failure of BEV launches and tractor downcycle are key dangers to our name.
Disclaimer: The views and suggestions offered on this evaluation are these of particular person analysts or broking corporations, not Mint. We strongly advise traders to seek the advice of with licensed specialists, take into account particular person threat tolerance, and conduct thorough analysis earlier than making funding choices, as market circumstances can change quickly, and particular person circumstances might range.
