Indians’ craze for SUVs powers this large-cap stock to over 900% gains in 5 years. Is it in your portfolio?

Multibagger large cap stocks: Indians bought 41.53 lakh cars in the last financial year — the highest-ever sales in any fiscal year — with annual volumes staying above the 40-lakh mark for the third consecutive year. Rising incomes, an expanding middle class, and rapid urbanisation have been key drivers behind the steady growth in passenger vehicle sales in Asia's third-largest economy.

Within the passenger vehicle segment, sports utility vehicles (SUVs) have emerged as the top choice among millennials. Known for their versatile performance and commanding road presence, SUVs have overtaken traditional segments, appealing to a younger, more aspirational demographic.

The blend of style, performance, and utility resonates strongly with the adventurous spirit of today’s youth, making SUV ownership more than just a mode of transport — it’s a lifestyle statement.

Mahindra & Mahindra is at the forefront of this SUV boom, tapping into the surging demand with a robust portfolio of rugged, feature-rich models such as the Scorpio-N, XUV700, and Thar. With no sedans or hatchbacks in its lineup, the company has positioned itself entirely around SUVs and compact SUVs — a strategy that has delivered strong, sustained sales momentum.

Touched new milestones

The company wrapped up FY25 with sales of 551,487 SUVs, marking its highest-ever annual volume and registering a robust 20% year-on-year growth. With this record performance, the company not only retained its position as India’s No. 1 SUV manufacturer but also emerged as the No. 2 passenger vehicle company by revenue.

Additionally, it crossed a 50% market share in the LCV <3.5T category and scaled up its international operations by 41% year-on-year. In a significant sustainability milestone, M&M also became the only Indian automotive company to be recognized as a world leader in the DJSI Index this year, according to its latest regulatory filing.

The March quarter recorded the company’s highest-ever quarterly volumes, with 149,129 SUVs dispatched — an 18% increase. Continued demand for popular models such as the Scorpio, XUV 3XO, XUV700, and Thar contributed to this growth.

Its newly launched born-electric SUVs — the XUV.e9 and BE.6 — also supported in boosting sales. In March, M&M dispatched a combined total of 3,014 units of the BE.6 and XUV.e9, following 3,196 units sold in February.

Production capacity for the Thar Roxx now stands at 10,000 units per month as of March, with flexibility between 3-door and 5-door variants. Meanwhile, XUV700 production rose to 8,887 units in March, up from 6,910 units in the same month last year.

It dispatched 6,851 units of the XUV700 and sent 8,936 units of the Thar and Thar Roxx to dealers during the last month, which is an increase of 3% YoY and 48% YoY, respectively.

The strong sales also contributed to a 20% jump in its consolidated net profit to ₹1,438 crore in the auto segment during Q3FY25, with revenues reaching ₹23,391 crore.

Stock delivers 953% return in 5 years

Amid a strong surge in SUV sales—which significantly contributed to the company’s overall growth—the impact was clearly reflected in Mahindra & Mahindra's share price. From trading at ₹245 per share in March 2020, the stock has soared to the current market price of ₹2,580, delivering a massive gain of 953%.

In February, the shares hit a record high of ₹3,270 apiece but failed to sustain that level. Rising global trade tensions, concerns over Tesla’s entry into India, and fears that the Indian government might reduce duties on auto imports have all weighed on the stock in recent weeks, pushing it 21% below its peak. 

However, analysts remain optimistic about the company’s future prospects, citing its strong positioning in the Indian market.

Analysts eye continued growth backed by a robust SUV lineup

Given the encouraging initial response to the company’s electric SUVs, the management expects to sell around 5,000 units per month in the initial months post-launch. The new EVs are attracting a fairly new customer profile—largely in the ₹25–30 lakh price range—many of whom may not have previously considered purchasing an M&M vehicle, according to domestic brokerage firm Motilal Oswal.

The brokerage believes that the company is well-positioned to outperform across its core businesses, driven by a healthy recovery in rural markets and new product launches in both UVs and tractors.

Another domestic brokerage, ICICI Securities, also projects M&M to sustain its strong performance, supported by a robust UV portfolio, market share gains in both SUVs and tractors, an improving margin trajectory, and a better outlook for the Farm Equipment Segment (FES).

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.