Mahindra & Mahindra has seen a dent in its stock price on concerns about lower volume growth in its SUV and tractor segments – the standout performers in the ongoing financial year.
While the good news is that analysts are expecting the stock performance to improve gradually, for FY2024, Mahindra management is trying to work around the challenge of chip shortage which has affected its primary business.
On the product front, the SUV maker has seen quite a robust demand from consumers for all of its recent launches – XUV700, Scorpio-N, Scorpio Classic and Thar among others – with waiting periods for some variants extending up to 24 months.
On the other hand, it has been struggling to meet customer demands for its passenger vehicle as it tries to ramp up production. Coming to the demand for the tractor segment, it has been consistent, but YoY growth could be slower thanks to a high base as well as three Navratnas in FY2023.
In the last 11 months, the company has sold 3.22 lakh passenger vehicles and 3.55 lakh tractors. Mahindra has been trying to ramp up its production and had announced its intent to increase SUV production capacity by 69 percent by Q4 FY2024, but the shortage of semiconductor and supply chain has created somewhat of a speed bump.
