M & M Gets A Legup From Fiis
The Mahindra & Mahindra stock witnessed speculative activity last week. The scrip price firmed up due to buying support extended by foreign institutional investors. Analysts say that the conference by the company for research analysts may also have contributed to the increased activity in the counter.
The stock, which finished the week at Rs 379 on the BSE, gained Rs 27 over the previous week's close of Rs 352. On the NSE, the stock witnessed a rise of Rs 26.80 over the previous week's close of Rs 353.25.
The counter witnessed a significant volatility in trading volumes. On the BSE, 3,532 shares were traded on Monday, while on the NSE 4300 shares changed hands. The activity spurted by Thursday when the counter witnessed trading in 1 lakh shares on the BSE and 1.83 lakh shares on the NSE.
The meeting arranged by the company apparently focussed on all aspects of the company. An analyst at a leading institutional brokerage who attended the meeting, said: The company officials made a presentation focussing on positive and negative factors that would affect their performance in the future. The company is also building up capacity for tractors. The performance of the company depends on the demand in the rural sector. However, the cyclical factor here is less. The rural demand is expected to be limited in the near future.
Brokers say that the rally in the counter was witnessed due to the focus shifting from Telco and Bajaj Auto - the two main stocks in the auto sector (original equipment). Commented a dealer at an institutional brokerage: The focus is now on the third best stock in the auto sector that has always caught the fancy of the FIIs and the domestic institutions. However, for the past few months, major auto stocks have lost ground. M&M is the only company that seems to be doing well.
The week witnessed institutional dealings with leading foreign institutions buying and domestic institutions selling on the counter. Said a BSE broker: There were some FIIs who actually sold the stock. Probably, everyone will wait for the announcements of the Budget and then take decisions. Market players also say that the Budget is not likely to favour the company as everybody expects the government to impose a diesel vehicle surcharge.