Mahindra and Mahindra Ltd stock surged to an all-time high a day after the automaker and Volkswagen AG announced the expansion of their alliance to accelerate the electrification of the Indian auto market.
As part of the deal, Volkswagen AG has agreed to supply electric components to Mahindra's new electric platform INGLO. The deal was announced on Monday when the stock markets were closed due to Independence Day.
On the BSE, the stock price of Mahindra & Mahindra closed at a record high of Rs 1288.40 per share, which is 2.28 per cent higher when compared with its previous session's close. The stock hit an intra-day high of Rs 1298.80 during Tuesday's session.
Volkswagen AG and Mahindra & Mahindra on Monday expanded their cooperation and signed a term sheet under which the German carmaker will supply electric components to its Indian peer.
The companies said that the agreement covers components of Volkswagen's open platform for electric vehicles (EVs), called MEB, to supply Mahindra's new electric platform INGLO.
The INGLO platform, which will power all of Mahindra's EVs, offers options ranging from 60-80 kilowatt hour (kWh) battery capacity and fast-charging of up to 80 per cent in less than 30 minutes, Mahindra said, without specifying the range of the EVs.
Tata Motors, which currently dominates India's EV market, says its Nexon EV's 40.5 kWh battery offers a range of 437 kilometres.
The companies said that the cooperation aims for a volume of more than 1 million vehicles by 2030 and includes the equipment of five electric sports utility vehicles (SUV) based on INGLO.
"The partnership not only demonstrates that our platform business is highly competitive, but also that the MEB is well on track to become one of the leading open platforms for e-mobility," Volkswagen management board member Thomas Schmall said.
Schmall declined to provide firm numbers but said that the agreement would translate into a significant operating result that he said would be comparable to a medium-sized brand within the Volkswagen group.
Volkswagen and Mahindra in May said they were exploring a partnership in the supply of electric components, making Mahindra the second large customer for the MEB platform after Ford.
They said they would finalise the agreement by the end of 2022.
Mahindra has said it expects electric models to make up between 20 per cent and 30 per cent of its total SUV sales by March 2027. The company sells some of India's most popular combustion engine SUVs, including the Scorpio and Thar.
On Tuesday, auto stocks led the rally in domestic equity markets. Indeed, the Nifty Auto index hit a record high with its 2.6 per cent gain.
The 30-share BSE Sensex index jumped 379.43 points, or 0.64 per cent, to 59,842.21 and the broader NSE Nifty index rose 127.10 points, or 0.72 per cent, to 17,825.25.
At close, the NSE Nifty 50 index posted its highest level since April 5.
The benchmark bourses have gained almost 11 per cent during the last four weeks cumulatively, recouping all of the losses they have sustained in 2022. The domestic equity markets had their best week in July since February 2021.
Reuters quoting Refinitiv Eikon data reported that 22 of the 43 companies listed on the Nifty 50 index beat analysts' expectations for results in the June quarter. Nearly all Indian companies had reported their results by Friday.
Strong June-quarter results drove shares of Hero MotoCorp and Life Insurance Corporation of India, which ended up 2 per cent and 2.3 per cent, respectively. Maruti Suzuki soared 2.19 per cent to ₹ 8890.05.