Mahindra & Mahindra tractor-led portfolio to cushion revenue fall

Higher tractor margins, cash on books and better capital allocation policy are positives

The stock of Mahindra & Mahindra (M&M) has witnessed sharp recovery since the beginning of the month, gaining 25 per cent, against a 20 per cent uptick in its peer index, BSE Auto. 

The gains have come on the back of expectations that the company’s rural portfolio and better capital allocation will help it navigate the slowdown better than other players.

With the resumption of agricultural activities from April 20, retail outlets selling agricultural machinery and spare parts are expected to resume operations. Further, the interstate movement of harvesting- and sowing-related machines, such as combined harvesters, is also exempt.

M&M will be a