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M&M gains on favorable monsoon forecast

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Capital Market
Last Updated : Jun 06 2016 | 3:47 PM IST

Mahindra & Mahindra rose 1.7% to Rs 1,376.50 at 12:12 IST on BSE, with the stock extending gains registered during the previous trading session triggered by the weather office retaining its forecast of above normal rains for the 2016 monsoon season.

Meanwhile, the S&P BSE Sensex was down 30.17 points or 0.11% at 26,812.86.

On BSE, so far 40,000 shares were traded in the counter as against average daily volume of 92,950 shares in the past one quarter. The stock hit a high of Rs 1,386.40 and a low of Rs 1,358 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 stock had underperformed the market over the past one month till 3 June 2016, advancing 2.08% compared with Sensex's 6.39% rise. The scrip had, however, outperformed the market in past one quarter, gaining 11.36% as against Sensex's 9.09% rise.

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

Shares of M&M had risen 1.55% to settle at Rs 1,353.45 during the previous trading session on Friday, 3 June 2016, after India Meteorological Department (IMD) retained its previous forecast of above normal rains for the 2016 southwest monsoon season (June to September). Good rains may boost demand for tractors. Mahindra & Mahindra (M&M) is the largest tractor maker in India in terms of market share.

Quantitatively, monsoon season rainfall for the country as a whole is likely to be 106% of the long period average (LPA) with a model error of plus/minus 4%, the IMD said after trading hours on 2 June 2016. In its first stage forecast issued on 12 April 2016, the IMD had forecast rainfall to be 106% of the LPA with a model error of plus/minus 5%.

IMD today, 6 June 2016, said that conditions continue to remain favorable for the onset of the southwest monsoon over Kerala during next 2-3 days. There has been delay in the onset of the monsoon rains in Kerala this year from the normal onset date which is 1 June. The arrival of the rains at the Kerala coast marks the onset of the June-September southwest monsoon season in India.

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M&M's net profit rose 6% to Rs 583.73 crore on 14.8% growth in net sales to Rs 10666.43 crore in Q4 March 2016 over Q4 March 2015.

The 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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First Published: Jun 06 2016 | 12:09 PM IST

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