M&M extends losses after SC bans registration of new luxury diesel cars, SUVs in Delhi till March 2016

Mahindra & Mahindra dropped 1.3% to Rs 1,203 at 11:45 IST on BSE, with the stock extending previous session's losses after the Supreme Court's order, banning registration of new luxury diesel cars, SUVs in Delhi till March 2016

The stock had dropped 5.44% to Rs 1,218.90, yesterday, 16 December 2015. Supreme Court passed the order yesterday, 16 December 2015.

Meanwhile, the S&P BSE Sensex was down 27.77 points or 0.11% at 25,466.60.

High volumes were witnessed on the counter. On BSE, so far 1.17 lakh shares were traded in the counter as against average daily volume of 72,184 shares in the past one quarter.

 

The stock hit high of Rs 1,218.35 and low of Rs 1,196.30 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 1,095 on 7 September 2015.

The stock had underperformed the market over the past one month till 16 December 2015, dropping 4.64% compared with Sensex's 1.03% fall. The scrip had, however, outperformed the market in past one quarter, gaining 4.57% as against Sensex's 1.81% fall.

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

Supreme Court yesterday, 16 December 2015, banned registration of sport utility vehicles (SUVs) and private cars of the capacity of 2000 CC and above using diesel as fuel in Delhi upto 31 March 2016. It added that diesel vehicles of 2000 cc and above and SUVs are generally used by more affluent sections of our society and because of the higher engine capacity are more prone to cause higher levels of pollution. The raft of measures were announced by Supreme Court in a bid to curb Delhi's alarming pollution levels.

Supreme Court's decision effectively stops the sale of Mahindra & Mahindra (M&M)'s popular vehicles, such as Scorpio and XUV 500 during the ban period. M&M also has a majority stake in SsangYong Motors of South Korea, which sells luxury SUVs in India.

The new commercial light duty diesel vehicles can for the present continue being registered in Delhi on account of the dependence of the public on such vehicles for supply of essentials, the court said.

The order comes days after the Delhi government announced a radical road rationing formula in Delhi, to be implemented from 1 January 2016, wherein odd and even numbered cars will be kept off the roads on alternate days.

The National Green Tribunal said in an order issued on 11 December 2015, that new diesel vehicles will not be registered in NCT, Delhi and that there will be no renewal of registration of diesel vehicles that are more than 10 year old in the capital city. The tribunal's order is an interim measure to curb alarming pollution levels in the Delhi. It also directed all the public authorities in NCT, Delhi to prepare an action plan for phasing out of diesel vehicles, particularly the trucks, being used by them.

M&M's net profit declined 2.4% to Rs 923.56 crore on 1.8% decline in net sales to Rs 9121.79 crore in Q2 September 2015 over Q2 September 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.

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