Shares of Mahindra & Mahindra (M&M) hit a 52-week high of Rs 675, up 6 per cent on the BSE in the intra-day deals on Wednesday after the company said it will make new K2 series tractors in Telangana. The stock surpassed its previous high of Rs 666 touched on September 22, 2020.
“The company’s Farm Equipment Sector (FES) will manufacture a new tractor series called the ‘K2’, exclusively at the company’s tractor manufacturing facility at Zaheerabad in the state of Telangana,” M&M said in a press release on Tuesday.
The new K2 series is Mahindra’s most ambitious light-weight tractor program. K2 will bring incremental investments of Rs 100 crore into Mahindra’s Zaheerabad facility and double employment in the tractor plant by 2024, the company added.
The company further said the new series will enable Mahindra to introduce products across four new tractor platforms, in the Sub Compact, Compact, Small Utility and Large Utility tractor categories, covering 37 models across various HP points. The new series will cater to domestic as well as international markets including USA, Japan, and South East Asia.
Meanwhile, in the past seven trading days, the stock has gained 10 per cent after the company reported healthy operational performance in the September quarter (Q2FY21). The company’s operating margin (OPM) improved 370 basis points to 17.8 per cent in Q2FY21 against 14.1 per cent in Q2FY20. The margin performance was attributable to lower other expenses and employee costs. Revenues grew 6 per cent year-on-year to Rs 11,590 crore from Rs 10,935 crore in the corresponding quarter of the previous year. Profit after tax (PAT) after extraordinary items declined 88 per cent to Rs 162 crore from Rs 1,355 crore.
The proactive steps from the Reserve Bank of India (RBI) have kept domestic financial conditions easy and system liquidity in surplus. Kharif sowing and the recent Agricultural Reforms portend well for the rural economy. Manufacturing capacity utilisation is expected to recover in Q3 and activity to gain some traction from Q4 onwards. However, capex and exports are likely to remain subdued, the company said.