Mahindra & Mahindra fell 1.04% to Rs 1,402.20 at 14:24 IST on BSE after the company declared weak Q1 June 2017 results during market hours today, 4 August 2017.
Meanwhile, the S&P BSE Sensex was up 2.50 points, or 0.01% to 32,240.38.On the BSE, 84,000 shares were traded in the counter so far, compared with average daily volumes of 1.16 lakh shares in the past one quarter. The stock had hit a high of Rs 1,424.30 and a low of Rs 1,395.80 so far during the day. The stock hit a record high of Rs 1,508.80 on 9 August 2016. The stock hit a 52-week low of Rs 1,141.80 on 2 December 2016.
The stock had underperformed the market over the past one month till 3 August 2017, rising 2.30% compared with 3.18% rise in the Sensex. The scrip had also underperformed the market in past one quarter, rising 7.28% as against Sensex's 7.97% rise. The scrip had also underperformed the market in past one year, falling 1.38% as against Sensex's 16.32% rise.
The large-cap company has equity capital of Rs 310.55 crore. Face value per share is Rs 5.
Net profit of the combined entity Mahindra & Mahindra (M&M) and Mahindra Vehicle Manufacturers (MVML) fell 19.98% to Rs 772.31 crore on 5.41% rise in total income from operations to Rs 11094.10 crore in Q1 June 2017 over Q1 June 2016.
MVML was set up as a 100% subsidiary of M&M with a view to source contemporary products for expanding the market offerings of the company.
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The automotive industry in Q1 June 2017 was impacted due to the impending transition to goods and services tax (GST) from 1 July 2017 with the passenger vehicles sales being adversely impacted in anticipation of a price reduction due to GST and reporting a nominal growth of 4.4%. The sales of heavy commercial vehicle goods segment showed a dip as a result of pre-buying of BS3 vehicles in Q4 March 2017, saturation of replacement demand and production constraints of BS4 models leading to Q1 June 2017 sales being the lowest in past 13 quarters.
Based on a normal monsoon outlook, tractors sales continued to post growth for the months of April and May 2017. However June 2017 witnessed a de-growth of 1.7% owing to the uncertainty with regard to transition to a GST regime. Overall the domestic tractor industry witnessed a growth of 8.5% in Q1 June 2018. The company however, outperformed the industry and grew 13.2% leading to the highest ever domestic tractor market share for a quarter at 45.8%.
In its outlook, M&M said that India's macro-fundamentals remain robust due to sustainable growth, steady commodity prices and continuing push to the reforms drive by the government, which has just rolled out the GST - the biggest tax reform attempted in the country that will alter the landscape in due course of time. The twin deficits remain under control and CPI inflation has fallen below the Reserves Bank of India (RBI)'s lower bound of 2%. The monsoon has covered the whole country ahead of schedule. Cumulative seasonal rainfall and Kharif sowing has been higher than normal so far. The RBI has lowered the repo rate in its latest policy and may ease further, if the monsoon turns out to be well spread and inflation readings remain benign. India's growth momentum is likely to pick up in the coming quarters with ongoing re-monetisation, further easing of interest rates and fillip to consumption demand. The company said it remains geared to capitalise on these opportunities through its reach, products and focus on innovative technology.
Separately, M&M informed that the loans & investment committee of directors approved selling up to 96.66 lakh equity shares, or 13.74% equity of the company in Mahindra Logistics (MLL), a subsidiary of M&M, as part of the proposed initial public offering of MLL. The announcement was made after market hours yesterday, 3 August 2017.
M&M enjoys a leadership position in tractors and utility vehicles in India.
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