Shares of Mahindra & Mahindra (M&M) moved higher by 2 per cent to Rs 521, gaining 3 per cent from day’s low of Rs 506, on the BSE on Wednesday after it reported double digit growth in domestic tractor sales in the month of June 2020.
Mahindra & Mahindra’s farm equipment sector (FES) reported 12 per cent year on year (YoY) growth in domestic tractor sales at 35,844 units in June 2020 as against 31,879 units sold in June last year. This is the second highest June sales ever, the company said.
Meanwhile, its export shipments declined 42 per cent during the month at 700 units as against 1,215 units in the same month last year. The company’s tractors' total sales for the month were at 36,544 units, up 10 per cent from 33,094 units in June last year.
"Timely arrival of the south west monsoon, combined benefits of a record Rabi crop, Government support for Agri initiatives and very good progress in the sowing of the Kharif crop have led to positive sentiments among farmers," the management said in its statement. READ HERE
These underlying factors along with better cash flows in rural markets have helped boost tractor demand during June. It is expected that this demand will continue to remain buoyant in the coming months, it said.
Overall, M&M's total sales including passenger, commercial and utility vehicles, more-than-halved to 19,358 units compared to 42,547 units sold in June last year.
"The automotive industry has started to see recovery both in the passenger and small commercial vehicle segments. This has been led primarily by rising rural demand and movement of essential goods across the country. The company’s key brands such as Bolero, Scorpio and Pik-Ups, are all seeing good traction," said Veejay Nakra, Chief Executive Officer, Automotive Division, at M&M.
In the past three months, M&M has outperformed the market by surging 91 per cent as compared to 25 per cent rise in the S&P BSE Sensex.
At 01:24 pm, the stock was trading 1 per cent higher at Rs 515 on the BSE, as against 1.23 per cent rise in the benchmark index. A combined 4.3 million equity shares have changed hands on the counter on the NSE and BSE till the time of writing of this report.