Big morning for the auto stock, Mahindra & Mahindra. The share price of M&M is on fire today on hopes of GST rationalisation as well as the potential new launch offensives by the company. Over the Independence Day weekend, the company unveiled its Global Vision 2027 strategy, centred on the all-new NU_IQ, a modular SUV platform. Nomura calls the stock its most preferred pick in the auto space and is maintaining a Buy. They have a target of Rs 3,736 per share. This implies nearly 14% upside for the share price from current levels.
According to Nomura, “M&M has once again set a new benchmark with its NE_IQ platform, blending industry-leading technology with bold and forward-thinking design. By reinforcing its ‘authentic SUV’ DNA, we believe this launch strengthens M&M’s position at the core of its brand identity.” They added that the recent generations of M&M vehicles have consistently raised the bar across style, features, comfort, and safety—NE_IQ continues that legacy by elevating the brand’s aspirational appeal and enhancing versatility.
Nomura on M&M: How will NU_IQ SUV platform help global growth
Mahindra & Mahindra (M&M) unveiled its Global Vision 2027 strategy on August 15. According to Nomura, this all-new NU_IQ, a modular, “multi-energy SUV platform designed as a strategic blueprint for the future of Mahindra SUVs globally.”
The M&M management did not stop at just that. The launch was accompanied by four new concept SUVs – Vision S, Vision T, Vision SXT, and Vision X. Production for these are expected to to start in 2027. Nomura highlighted how “Mahindra is targeting white-spaces in both Indian and global SUV segments by offering premium SUVs on its new NU_IQ platform supporting multiple ‘top-hats’ and powertrains.” These include ICE, hybrid and electric, as well as FWD and AWD. As the platforms are region agnostic, it is expected to be used for both left- and right-hand drive, catering to customers across the world.
Nomura pointed out that these “versions are all aimed at opening new market opportunities globally.”
According to management, the NU_IQ platform represents a step-change in Mahindra’s product strategy, blending flexibility, advanced engineering, and future.
Nomura on M&M: A “multi-energy” modular platform
Moreover, Nomura expects that the NE_IQ platform may help “mitigate execution risk and position M&M to seize market share both domestically and globally in the mainstream SUV space.” They are confident that “M&M is poised to outperform its peers in coming years, and reaffirm our conviction that it remains our top pick in the sector.”
Nomura on M&M: The big valuation bet
The stock currently trades at 13x FY27F EV/EBITDA. Nomura values the core M&M+ MVML business, based on a 15x target EV-EBITDA on average FY27-FY28 EBITDA.” According to the brokerage house, the investments in other listed subsidiaries is seen at Rs 467/share at the current market price, and it looks at adding Rs 102 for key unlisted subsidiaries at market value. However, they are factoring in some key risks for the target price – “Material capital allocation to loss-making subsidiaries, including rising losses in unlisted subsidiaries, and any material investment in these subsidiaries will affect return ratios and stock performance,” they added.
Additionally, Nomura says investors should factor in the potential impact of weaker monsoons on tractor demand. Thus, it could lead to downside risks to their estimates, as per Nomura.