M&M edges higher in volatile trade

Mahindra & Mahindra rose 0.55% to Rs 1,339.90 at 13:14 IST on BSE as the company expects vehicle prices to rise as the automobile industry adheres to various safety and emission norms announced by the regulator.

Meanwhile, the S&P BSE Sensex was up 162.19 points or 0.63% at 25,788.94.

On BSE, so far 1.06 lakh shares were traded in the counter as against average daily volume of 87,273 shares in the past one quarter. The stock was volatile. The stock rose as much as 1.65% at the day's high of Rs 1,354.70 so far during the day. The stock fell as much as 1.2% at the day's low of Rs 1,316.50 so far during the day. The stock had hit a record high of Rs 1,441.45 on 7 August 2015. The stock had hit a 52-week low of Rs 1,092 on 12 February 2016.

The large-cap company has equity capital of Rs 310.55 crore. Face value per share is Rs 5.

According to Mahindra & Mahindra (M&M), complying with safety norms would mean an average cost of Rs 25,000 to Rs 30,000 per vehicle and complying with BSVI norms would increase the price by around Rs 1.50 lakh per vehicle (approximate cost increase of Rs 90,000 plus taxes) based on current technologies for complying with these norms. M&M's Executive Director and Group President, Auto and Farm Equipment Sectors & Member of the Group Executive Board Dr. Pawan Goenka said in an interaction with auto industry analysts on 13 April 2016 that the capex requirement for M&M for BSVI compliance would be around Rs 500 crore. There will be additional capex to be incurred at the vendors end, he said.

Goenka said that the company is working on a range of gasoline engine options. The company intends to launch gasoline options for its sports utility vehicles Scorpio and XUV500 within the next 12 months. KUV100 has received good response from customers. Currently, KUV100 has a waiting period of 6-8 weeks. The gasoline variant of KUV100 has received good response and contributes to about 45% of KUV100 sales.

Goenka expects the ongoing momentum in M&M's exports growth to continue with the neighboring markets as well as Africa and South American markets.

With regard to the tractors business, Goenka said that the company is very well poised to take advantage of the expected growth in the tractors industry in India with a strong launch of its 'Yuvo' series (5 tractor models) in the mainstream segment of 30-45 hp which accounts for 80% of the tractors market size. The Yuvo has been developed after significant understanding of customer insights, he said.

M&M's net profit declined 14.2% to Rs 807.99 crore on 17.1% growth in net sales to Rs 10900.39 crore in Q3 December 2015 over Q3 December 2014.

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.

Powered by Capital Market - Live News