Shares of Mahindra & Mahindra hit a fresh 52-week high of Rs 893 on the BSE aftre rallying 7 per cent on Thursday. The stock has surged 19 per cent in the past four days after reporting strong tractor sales volume of 35,000 units for January 2021, up 50 per cent over the same month previous year. The stock is 10 per cent away from its all-time high level of Rs 992, touched on August 30, 2018.
At 10:37 am, M&M was trading 5 per cent higher at Rs 877 on the BSE, as compared to 0.4 per cent decline in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 8.7 million equity shares changing hands on the NSE and BSE.
The tractor demand continues to be strong with expansion in Rabi acreage, very high reservoir levels and higher liquidity in the hands of farmers with timely Kharif procurement. The management expects demand to remain robust on account of these factors and Government’s focus on agriculture & rural sector.
With low channel inventory, the brokerage firm expects this segment to continue to report robust numbers, going forward. Tractor remains the only segment in the automobile space, which has clocked double digit growth on year to date fiscal year basis with some other segments still down in double digits.
Brokerage firm Emkay Global Financial Services has retained its positive view on M&M's management’s efforts to tighten capital allocation norms and expectations of sales cycle recovery.
“Steps taken to improve capital allocation in recent quarters are noteworthy – divestment efforts of Ssangyong, shutting down operations of Genzee, halting of investment plans in Mahindra Automotive NA, divestment of First Choice Services, closure of Gipps Aerospace and cancellation of Ford JV. Key risks are rising competition, failure of new products, increasing losses in subsidiaries and adverse input commodity prices,” the brokerage said in company update.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU