The share price of Mahindra and Mahindra (M&M) hiked over 9 percent in the early trading session on Monday, February 8, post the announcement of quarterly results on Friday. However, the company was trading 55.70 points or 6.43 percent up at Rs 921.30 on the Bombay Stock Exchange (BSE) at 12:26 pm. Similarly, on the National Stock Exchange (NSE) the shares were at Rs 920.90 witnessing an increase of 55.40 points or 6.40 percent. In the morning session, the stock was trading at Rs 946.45, up Rs 80.85, or 9.34 percent.
The auto major on February 5 reported a whopping 39.6 percent year-on-year growth in profit at Rs 530 crore for the December Quarter.
Other announcements made in the quarterly result:
1. The operating margin of the company expanded 220 basis points from the year-ago quarter to 17 percent.
2. The company witnessed a growth of 19.6 percent in tractor volumes and has sold 97,420 tractors in the domestic market in Q3 FY21. Whereas, the utility vehicle business grew 11 percent.
3. The revenue of the company and its arm Mahindra Vehicle Manufacturing grew 16 percent to Rs 14,057 crore in the quarter on yearly basis.
4. However, the company noted a fall of 7 percent in its automotive business sales to 1,15,272 vehicles.
What Goldman Sachs and Nomura said?Goldman Sachs, which is a global research firm, has maintained a buy rating on the stock with a target of Rs 1,029 per share. The firm is of the view that the December Quarter earnings of Mahindra were above estimates and the company is geared for recovery.Nomura, which is a Japanese research firm, has also retained buy on the stock with a target of Rs 1165 per share.
Meanwhile, M&M is also offering discount offers on its various product lineups including XUV500, Marazzo, Scorpio, and the XUV300 to increase the sales of the vehicles. The offers will be valid till the end of February. While on February 6, the company also said that it is considering another increase in price across products in the first quarter of the next fiscal to counter the spike in the input costs.
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