M&M drops after weak auto sales in February

Mahindra & Mahindra lost 0.67% to Rs 966.95 at 9:32 IST on BSE after the company said its total auto sales declined 12% to 42,166 units in February 2014 over February 2013.

The company announced the sales numbers on Saturday, 1 March 2014.

Meanwhile, the S&P BSE Sensex was down 48.45 points or 0.23% at 21,071.67.

On BSE, so far 3,550 shares were traded in the counter as against average daily volume of 77,276 shares in the past one quarter.

The stock hit a high of Rs 974.45 and a low of Rs 964.85 so far during the day. The stock had hit a record high of Rs 1,026.45 on 20 May 2013. The stock had hit a 52-week low of Rs 741.50 on 28 August 2013.

The stock had outperformed the market over the past one month till 28 February 2014, surging 11.45% compared with the Sensex's 2.11% rise. The scrip had, however, underperformed the market in past one quarter, advancing 1.61% as against Sensex's 2.85% rise.

The large-cap company has equity capital of Rs 307.94 crore. Face value per share is Rs 5.

Mahindra & Mahindra (M&M)'s sales of Passenger Vehicle segment (which includes UVs and Verito) fell 18% to 19,308 units in February 2014 over February 2013. Domestic sales dropped 11% to 39,338 units in February 2014 over February 2013. The four-wheeler commercial vehicle segment sales fell 3% to 14,701 units while three-wheeler sales declined 2% to 4,724 units in February 2014 over February 2013. Exports were down 17% to 2,828 units in February 2014 over February 2013.

Commenting on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, M&M said, "The Auto industry has received the much needed boost in terms of an excise duty reduction and this has resulted in higher enquiries over the last one week. The recently concluded Auto Expo has also been a success which will only help in generating demand. At Mahindra we are hopeful that these positive initiative would be the beginning of a gradual upswing for the auto industry, as we move into the next financial year".

Separately, M&M on Saturday, 1 March 2014 said its total tractor sales rose 18% to 17,592 units in February 2014 over February 2013. Domestic tractor sales rose 19% to 16,552 units in February 2014 over February 2013. Exports increased 13% to 1,040 units in February 2014 over February 2013.

Commenting on the monthly performance, Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, M&M said, "We have achieved a cumulative domestic growth of 23% till February 2014. Tractor demand for FY 2014 till date has been robust due to a favorable monsoon and higher minimum support prices. The shortage of labour at farms has given a boost to mechanization resulting in higher demand for tractors".

M&M's net profit rose 11.7% to Rs 934.06 crore on 2.2% decline in net sales to Rs 10404.91 crore in Q3 December 2013 over Q3 December 2012.

The Mahindra Group operates in the key industries that drive economic growth, enjoying a leadership position in tractors, utility vehicles, information technology and vacation ownership. In addition, Mahindra enjoys a strong presence in the agribusiness, aerospace, components, consulting services, defence, energy, financial services, industrial equipment, logistics, real estate, retail, steel and two wheeler industries. The group as on 31 December 2013 comprised of 119 subsidiaries, 7 joint ventures and 12 associates.

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