M&M shares snap six-day losing streak

Mahindra & Mahindra (M&M) share price remained volatile as the stock fell 2.6 percent to hit its 52-week low of Rs 444.60 only to rebound to close with a mild gain of 0.50 percent on BSE on March 2.

With this, the stock snapped a six-day losing streak.

The auto major on March 1 reported a 42 percent decline in total sales at 32,476 units in February. The company sold 56,005 units in the same month last year.

In the domestic market, sales were down 42 percent to 30,637 units compared to 52,915 units in February 2019.

Exports dropped 40 percent to 1,839 units against 3,090 vehicles in the year-ago month.

In the passenger-vehicles segment, which includes utility vehicles, cars and vans, M&M sold 10,938 vehicles in February as against 26,109 vehicles in the same month last year, a decline of 58 percent.

Commercial vehicle sales fell 25 percent to 15,856 units as against 21,154 units a year ago.

In the medium and heavy commercial vehicles segment, M&M sold 436 vehicles during the month as against 686 units in the year-ago month.

Brokerage firm Motilal Oswal Financial Services maintained a “buy” recommendation on the stock, with a target price of Rs 666 which is a 46 percent upside.

“The ramp-down of BS-IV vehicle production has been in line with our plan for February. However, because of the unforeseeable challenges on the parts supply from China, our BS-VI ramp-up has been affected. This has resulted in a high de-growth in our billing volume for February and our dealer inventory is, now, under 10 days. Going into March, we anticipate the challenge on parts-supply to continue for another few weeks, before we get back to normalcy," said the company's Chief of Sales and Marketing, Automotive Division, Veejay Ram Nakra.

Shares of Mahindra & Mahindra traded 1.23 percent up at Rs 462 on BSE at 1255 hours.