After Rallying 170% This Year, Is SML Isuzu Still Worth Considering?

In a year when the stock market rebounded from early volatility, few expected SML Isuzu to emerge as one of 2025’s top-performing stocks. Yet, the commercial vehicle maker has delivered a stunning 170% return year-to-date, hitting a 52-week high of Rs 4,239.7 on July 24.

What’s Fueling the Rally?

Strong Financials: During Q1 FY26, the company’s YoY growth was 13.4%  in revenue of 8.5 billion, and a net profit of 670 million rupees at 44%. EBITDA grew 15% YoY at 1.1 billion rupees.

Mahindra & Mahindra (M&M) Acquisition: Mahindra  announced that it will acquire 58.96% holding in SML Isuzu at 5,546.3 million rupees. The open offer price is 1,554.6 rupees, which is significantly lower than the  current  levels, which has attracted investors for value unlocking and strategic synergies. This deal instantly gives M&M access to the 6.5–9.5 tonne intermediate commercial vehicle (ICV) space, potentially doubling its market share to 6%, with long-term plans to reach 20% by FY36.

EV Ambitions and Future Outlook

SML Isuzu entered the Electric Vehicles (EV) segment in early 2025 with its Hiroi EV Manch bus platform. As the government focuses on eco-friendly transportation and incentives on EVs to promote the adoption and shift to Electric vehicles, the company is well positioned to capitalize on this initiative in metro cities.

The company is also increasing its local and export reach, with focus on 5-12 tonne commercial vehicle segment with dealerships expansion, more fuel efficient vehicles and customized vehicles.

Conclusion

SML Isuzu has comfortably outperformed on the back of earnings strength, a transformational open offer, and EV ambitions for the future. Yet, following a 170% rally, valuations are stretched, and caution is recommended for investors.

Disclaimer: The article is provided for general information purposes only. Investors should conduct their own research or consult with a professional financial advisor before making any investment decision.

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