M&M | M&M share price: How M&M beat demand sluggishness and surged ahead of its peers? Rajesh Jejurikar explains

Rajesh Jejurikar, ED & CEO, Auto & Farm Sector, M&M, explains how M&M beat the industry on both SUV and tractor segments. In SUVs they have 23% revenue market share and in tractors, they have 44% market share.

In SUVs, there have been five successful launches over the past five years. The first significant launch occurred in 2020 with the introduction of the Thar 3-door model. Following this, the XUV700 was released, achieving remarkable success, and subsequently, the Scorpio N also performed exceptionally well. The introduction of the 3XO is particularly noteworthy. They have set an ambitious goal to become the market leader within the next two to three years, Additionally, they launched Thar ROXX in August of 2024.

The uptrend continues. Demand sluggishness has not impacted your business at least. Why are you growing when the industry per se is not growing?
Rajesh Jejurikar: You are right that we have grown much faster than the industry, both on the auto and the tractor side. So, let us first take the SUV piece, where we grew 20% in the quarter, while the industry was much lesser. We have gained market share and our revenue market share in SUV is about 23% now, which is quite substantial. But what is really interesting is that in spite of the price points that we have, which are way above the average price points of the industry, we are still number two on volume share.

We are still a very large volume player doing about 48,000 to 50,000 a month. And we always believe and I am sure you will want to know that in the context of the EVs that are coming as well which is demand gets created by products and products create excitement with customers or they do not and we have had a series of good launches. So, the reason we are growing this year is two very good launches that happened in 2024, the 3XO and we were weak in that segment which is the subcompact, less than four meter segment, and then the ROXX. So, both of these have done very well and added volumes for us while we have kept the rest of the portfolio strong and robust.

Let us first focus on tractors. What gives you the kind of conviction that the demand is going to remain strong at a time when we are talking about overall rural slowdown?
Rajesh Jejurikar: The rural slowdown we are coming out of based on everything that we have seen, the country has seen almost 18 months of rural slowdown and starting with the festival season sometime in October, we have seen demand come back and that has sustained. The drivers of that have been a very good rainfall and though it came late in some parts of the country, overall, the rainfalls have been very good.

So, kharif production was up, rabi sowing is on track and that means most of the rabi areas are on track, reservoir levels are almost at an all-time high, significantly above the LPA. All of these are positive factors, then there are the terms of trade, which drive sentiment. Terms of trade is basically output inflation over input inflation.

That basically represents the margin that the farmer is making. All of these have been positive factors. One of the reasons rural was slow as well was the very relatively low spending in the rural economy on agriculture. Both agriculture and the rural development spends that had come down, has started picking up. There are several positive drivers for the rural economy and that is being picked up in multiple sectors. We hear that even in the FMCG and so on, people are beginning to see faster growth in rural areas rather than in urban areas.

You are growing when industry is not growing and the economy per se for the quarter gone by was not in a fantastic shape. I would have a glass half full approach now. The base effect would kick in, impact of RBI policy, impact of tax cut would kick in, which means things will normalise. If you are growing in a tough environment, what happens when things normalise?
Rajesh Jejurikar: Now, are you talking tractors or SUVs, the answer would be different. Both actually.
Rajesh Jejurikar: So, let us take the tractor question first, since you know we just left off on that. We are not getting into a numeric outlook for next year yet, but we have also gained market share this year. So, we are now close to 44% market share, now when you are on a high market share in a segment where shares are typically very sticky, this year we have grown cumulatively April to December about 1.7 share point, which is quite substantial in tractors. So, one of the reasons which is driving our pace of growth faster than the industry is also that we have gained market share in tractors. It will be too much to say that we will continue to gain share on a high base, but even the kind of a strategy and approach of doing things to keep us on track on share and we would expect the industry to get into a growth, continue its growth momentum for the reasons I just explained. So that is on the tractor side.

On the SUV side, the growth now will come out of the electric origin SUVs that we are just launching. We revealed them in November and we opened bookings on February 14. We believe that that is going to open up a new segment and I am going back to products being segment creators. We are seeing that the profiles of the people coming in are not those who had planned to buy an EV. Very few were waiting for an EV. A lot of them were looking for exciting offers and good looking, stunning design, tech, performance, and they are seeing all of that.

There is also a lot of pride about an Indian company being able to bring out products which look and feel very international. So, there are several people coming into the basket of consumption who were not thinking about buying a car right now at these price points. We believe that will drive growth for us as we go into next year.

So, 2021 was XUV, then it was Thar 2-door, then it was Thar 4-door, then there was a SUV …
Rajesh Jejurikar: 3XO.

3XO, which was again a great launch. So, this year is all about EV from the Mahindra stable, the headlines would be all around EVs.
Rajesh Jejurikar: So let us just recap this portfolio. I think the first really good launch was 2020 which was the Thar 3-door, then we had the XUV700 which has done very well, then we had the Scorpio N which did very well, then we did the 3XO and 3XO is actually very interesting because in that segment, which is a very large chunk of the market, we were actually the number five player and we have kind of said in two to three years we can be number one and we are now doing close to 8,000-9,000 vehicles of that per month and then, of course, we had the Thar ROXX in August last year.

So, there have been five very good launches over the last five years. Now, we will, of course, have to consolidate on these and so on but the growth driver for us in this year is really the two new electric origin SUVs and this is the first time we have launched two products together.