M&M is a key index loser in trade today, down 4% intra-day. The stock is down almost 10% in the last 5 days. The share price is down 15% from it’s all-time highs of Rs 3,276.30 (on BSE). However, M&M has outperformed the benchmark Indices in the last one year. The share price of M&M has yielded returns of 52% as compared to Nifty and Sensex delivering gains of 3% each in the same period. International brokerage house Nomura has a Buy recommendation on M&M and identified the stock as their top pick in their OEM coverage universe.

Nomura has a target price of Rs 3,681/share, implying nearly 30% upside from current levels. “The stock currently trades at 12x FY27 EV/EBITDA (adjusted for subsidiaries) Vs peers at 12-14x,” they added further justifying the higher price target.

Nomura on M&M: Can lead BEV revenue market share

Here are three reasons why Nomura has a bullish stance on M&M –

#Nomura on M&M: Bulk of bookings for top-end variant

M&M has received 30,000 bookings on day 1 and the bulk of them, nearly 73% of the bookings have come for the 9e top-end 79KWH Pack Three. As mentioned in their previous note after the test ride, they expected the 9e to generate more interest. The booking amount is Rs 21,000 per vehicle and the cancellation penalty is 10% of the amount. They believe that “M&M could take a lead position in BEV revenue market share The 30,000 orderbook, especially with 73% top-end mix, is a very strong number, given that:

  1. The price points are very high and
  2. The EV market in India is still in a nascent stage”

According to Nomura, “BEV sales of 4,000-5,000 units per month implies a 10-15% market share in this segment, which is a fairly strong number. As many customers have been hesitant about EVs initially, volumes can increase further if there are positive customer reviews. We believe MM has the potential to take the No. #1 position in BEV revenue market share in FY26.”

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#Nomura on M&M: See upside to strong booking numbers

Nomura expects “likely upside” to the strong booking numbers. This is because they explained that as per initial dealer feedback, “the BE 6 bookings are more from younger customers. The 9e, however, is getting more demand from customers aged over 40 years, who are also attracted to the luxury segment. We factor in M&M’s BEV sales at 3,000-7,000 units per month in FY26-FY27.”

However, they would wait to assess scope of cannibalization with M&M ICE portfolio and hence, “maintain the SUV estimates of 5,4,5000 units (+19% YoY) for FY25.” They expect SUVs to see “18% YoY upside in FY26 and +9%YoY growth in FY27.”

#Nomura on M&M: Localisation a big positive

According to Nomura, “with this strong mix, initial profitability for BEVs will be healthy but EBIT losses are possible at the initial stage due to high investments.” They expect the EBIT/Vehicle for EVs to be at par with ICEs with the help of PLI approvals.

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According to the Nomura report, “M&M’s EVs may also have an advantage over global competitors in getting PLI approvals due to its higher local sourcing. The success of M&M’s BEVs will be an important milestone for India’s EV adoption, in our view.”

They explained that OEMs like Maruti Suzuki, Hyundai and Tata Motors are stepping up efforts on BEV models and charging ecosystem in India this year. Hence, “customer comfort with EVs should improve significantly in 2025,” Nomura added.