M&M drops on concerns over high tractor inventory levels

M&M shares declined as plans to stop tractor production for four days raised concerns over high inventory levels

Shares of Mahindra and Mahindra were down over 3% at Rs 1,276 as plans to stop tractor production for a period of four days raised concerns over high inventory levels because of weakening demand.

As part of aligning production with sales requirements, the company would be obeserving No Production Days at the tractor plants located at Rudrapur and Jaipur for four days during the balance period of October, 2014, Mahindra and Mahindra said in a release late Friday.

The release also said that the management does not envisage any adverse impact on availability of tractors in the market due to adequacy of tractor stocks to serve the market requirements.

The stock opened at Rs 1,316 and touched a low of Rs 1,271 so far. Over 190,000 shares were traded on both the stock exchanges so far.