M&M dips on disappointing August sales

August auto sales down 17% yoy at 37,897 units against 45,836 units in the same month year ago.

Mahindra and Mahindra (M&M) has moved lower by 3% at Rs 761 in otherwise firm market after reporting 17% year-on-year (yoy) drop in its auto sales at 37,897 units for the month of August 2013 on account of the continued weakness in the passenger vehicle (PV) segment. The company had sold 45,836 units in the month year ago.

The PV sales witnessed a steep decline of 27.5% yoy (1.9% mom) due to the subdued demand environment and rising competition amidst increase in excise duty which has impacted the company's products the most, says analyst at Angel Broking in a note.

The four-wheeler pick-up and the three-wheeler sales too witnessed a decline of 3.8% and 14.2% yoy respectively. Automotive exports also declined by 9% yoy during the month. MM had announced production cuts at its automotive plants in August to keep inventory under check.

The stock opened at Rs 774 and hit a low of Rs 756 in noon deals on BSE. A combined 754,707 shares change hands on the counter till 1159 hours on BSE and NSE.