Poor monthly sales weigh on M&M

Mahindra & Mahindra fell 2.63% to Rs 515 at 09:24 IST on the BSE after the company announced poor auto sales for August 2019.

Meanwhile, the S&P BSE Sensex was down 292 points or 0.78% to 37,041.15.

On the BSE, 9925 shares were traded in the counter so far compared with average daily volumes of 1.38 lakh shares in the past two weeks. The stock hit a high of Rs 519.1 and a low of Rs 513.55 so far during the day. The stock hit a 52-week high of Rs 992 on 30 Aug 2018. The stock hit a 52-week low of Rs 502.85 on 14 Aug 2019.

Mahindra & Mahindra (M&M) announced its total auto sales fell 25% to 36,085 units in August 2019 over August 2018. The company added that its total domestic sales declined by 26% to 33,564 units while its total exports fell by 15% to 2,521 units in August 2019 over August 2018. The announcement was made on Sunday, 1 September 2019.

Veejay Ram Nakra, chief of sales and marketing, automotive division, M&M said, the auto industry continues to be subdued in August due to several external factors.

M&M's Farm Equipment Sector (FES) announced its total tractor sales fell 17% to 14,817 units in August 2019 over August 2018. The domestic tractor sales declined by 15% to 13,871 units while tractor exports dropped 33% to 946 units in August 2019 over August 2018.

In a separate announcement made on Saturday, 31 August 2019, M&M said the company has signed a Share Subscription and Shareholder Agreement for subscribing upto 55% of the equity share capital of Meru Travel Solutions in tranches. Post the acquisition, Meru will become a subsidiary of the company, and the subsidiary companies of Meru, will in turn, also become subsidiaries of the company.

M&M added that the first tranche of investment would be made by around end of October 2019. The total cost of the said acquisition is Rs 201.5 crore and the acquisition is being made on cash consideration. Meru is a holding entity and via its subsidiary companies operates in the ride hail segment and corporate transportation solutions space.

M&M is engaged in the manufacture of passenger cars, commercial vehicles and tractors.

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