M&M drops after weak tractor sales in November

Mahindra & Mahindra lost 2.1% to Rs 1,295.95 at 15:17 IST on BSE after the company said its total tractor sales declined 34% to 15,333 units in November 2014 over November 2013.

The announcement was made during market hours today, 1 December 2014.

Meanwhile, the S&P BSE Sensex was down 134.43 points or 0.47% at 28,559.56.

On BSE, so far 72,000 shares were traded in the counter as against average daily volume of 74,561shares in the past one quarter.

The stock hit a high of Rs 1,336 and a low of Rs 1,231.25 so far during the day. The stock had hit a 52-week low of Rs 847 on 4 February 2014. The stock had hit a record high of Rs 1,421 on 4 September 2014.

The stock had underperformed the market over the past one month till 28 November 2014, advancing 3.92% compared with the Sensex's 6.75% rise. The stock had also underperformed the market in past one quarter, sliding 5.91% as against Sensex's 7.72% rise.

The large-cap company has equity capital of Rs 310.54 crore. Face value per share is Rs 5.

Mahindra & Mahindra (M&M)'s domestic tractor sales fell 36% to 14,207 units in November 2014 over November 2013. Exports surged 45% to 1,126 units in November 2014 over November 2013.

Commenting on the monthly performance, Rajesh Jejurikar, Chief Executive, Farm Equipment and Two Wheeler Division, M&M said, "We have registered a sale of 14,207 units during November 2014. The tractor industry has been difficult due to delayed rains and sowing. A delayed paddy crop, low yield and low prices for sugarcane, cotton and paddy have led to a low demand and low cash in hand. There is also a based effect to some extent as Diwali this year was in October 2014 vis-vis in November 2014 last year".

Separately, M&M during market hours today, 1 December 2014 said its total auto sales declined 13% to 34,292 units in November 2014 over November 2013. Sales of Passenger Vehicles segment (which includes Uvs and the Verito) declined 18% to 13,765 units in November 2014 over November 2013. The company's domestic sales fell 11% to 32,100 units in November 2014 over November 2013. Sales of 4-wheeler commerical segment declined 3% to 12,748 units in November 2014 over November 2013. Three-wheeler segment's sales fell 15% to 5,005 units in November 2014 over November 2013. Exports fell 27% to 2,192 units in November 2014 over November 2013.

Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division & International Operations (AFS), M&M said, "The auto industry continues to its sluggish demand on the back of factors such as low consumer sentiments and high interest rates. The reducing international crude prices and the subsequent lowering of fuel prices should help in revival of demand in the coming months. We also hope that the current excise duty rates will be extended beyond end of December to get much needed recovery for the auto industry. We continue to be optimistic on the back of a good response for our New Generation Scorpio and a comparatively better performance of our 4 wheeler commercial segment".

M&M's net profit fell 4.3% to Rs 946.63 crore on 6.8% growth in net sales to Rs 9418.10 crore in Q2 September 2014 over Q2 September 2013.

Mahindra Group enjoys a leadership position in tractors, utility vehicles, information technology, financial services and vacation ownership. In addition, Mahindra enjoys a strong presence in the agribusiness, aerospace, components, consulting services, defence, energy, industrial equipment, logistics, real estate, retail, steel, commercial vehicles and two-wheeler industries.

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