Share of Mahindra & Mahindra shot up sharply on Friday as the announcement was made. M&M share price surged up over 5% to hit a new all-time high of ₹1,864.65.

What Happened: The company in a press release announced entering into a supply agreement with the Volkswagen Group, The partnership will see Mahindra equip its INGLO electric platform with Volkswagen’s MEB electric components and unified cells. This agreement is an extension of their 2022 collaboration, with both companies also exploring additional opportunities for collaboration in India’s e-mobility sector.

Mahindra will be the first external partner to adopt Volkswagen’s unified cell concept, a crucial part of Volkswagen’s battery strategy. The supply agreement, spanning several years, will have a total volume of about 50 GWh over its lifetime.

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The collaboration aims to bolster the e-mobility footprint of both companies in the Indian automotive market and speed up electrification in the region. Mahindra intends to launch five all-electric SUVs in India based on its new INGLO platform, starting in December 2024.

The Indian automotive market, one of the world’s largest, is anticipated to witness significant momentum in the electrification of the passenger car segment in the coming years.

This partnership comes on the heels of a strong financial performance by Mahindra & Mahindra, which drove the recent rally in the auto giant’s stock. The company’s standalone net profit soared by 60% year-on-year to reach ₹2,454 crore, primarily driven by the automotive segment’s robust performance, a favourable product mix, and benefits from operating leverage.

The company’s revenue for the December quarter witnessed a 16% YoY growth, reaching ₹25,642.4 crore, predominantly fueled by robust volume expansion in the automotive segment.

Price Action: Mahindra & Mahindra shares were up 4.45% to trade at ₹1,843.65 in early trade on Friday.

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Photo generated with Dall-E.