Mahindra & Mahindra Share Hit 52-week High

The stock of Mahindra and Mahindra, The Automobile Company located in Mumbai has reached its new 52-week high of Rs.2204 by jumping over 2% in the morning session after the company announced that its overall sales have jumped by 13% at 70,471 vehicles in April, The stock has rallied around 50% in the past 6 months and the stock is showing strong strength on the charts.

Strong Auto Sales number from M&M

The company has announced that the overall sales have jumped 13% at 70,471 vehicles in April, out of which under the SUV segment, It has sold 41,008 vehicles in the domestic market which marks a growth of 18% on a YoY basis from April 2023. This growth in the SUV segment has significantly contributed to the overall rise in auto sales for Mahindra and Mahindra.

On April 30, the SUV major launched SUV – XUV 3XO at an aggressive starting price of Rs 7.49 lakh, going head-to-head in competition with Maruti’s Brezza, and Hyundai’s Venue.

Following the launch of the SUV, the management said that it aims to be among the top two players in the compact SUV segment over the next three years. Rajesh Jejurikar, Executive Director and CEO- of the Auto and Farm Equipment Sector, M&M. said “We are number five in that sub-segment that is the size of 6 lakhs and we hope to get number two or number one position in that.” 

The company holds a healthy SUV order book to ensure market share gains in PV space: M&M is the prominent market player in the domestic PV space predominantly in the SUV category with its recent launches like XUV 700, Thar & Scorpio-N being an instant hit with customers primarily driven by the cutting-edge technology & value proposition offered at the right price point.

Stock Fundamentals

Mahindra & Mahindra has a market capitalization of more than Rs.2,68,000 crores as of today. The Company has reported increasing profits in the past 4 years since 2020 with compounded profit growth of 143% in the past 3 years. Year-on-year sales are also rising from the past 3 years with Compounded sales growth of 17%. The stock currently trades at a fair price to an earning of 24 against the sector price to an earning of 26.40. It has a book value of 486.93 and the Price to Book ratio for M&M stands at 4.43.

Technicals of M&M:

Shares of Mahindra and Mahindra jumped up over 2% on Monday and has shown a breakout of Pole and Flag Pattern on its chart. With good volumes, the charts are suggesting more upside ahead from here. The Relative Strength Index is at 70, the RSI has been frequently hitting 70 levels during this uptrend of the stock. The stock is in a major uptrend from the past year and has given more than 90%  returns in that period.

The stock is also well above its key moving averages of 20,50,100 and 200 Day Exponential Moving Averages and with this breakout on charts in the daily and intraday time frames levels off Rs.2220 and Rs.2300 can be seen in the stock for this month’s session. The two current support levels for Mahindra and Mahindra are Rs.2130 and Rs.1980 respectively.

Conclusion: The stock has shown strong performance today and currently trades at Rs.2195 a piece with a jump of  +1.75%, The Stock is also among the top five Nifty gainers today. The technicals for the stock are still showing strengths and if the stock sustains well above Rs.2200 then targets of Rs.2300  can be seen. Analysts are also seeing this launch of SUV 3XO as a game changer. The price of the vehicle is also liked by the streets which is in the competitive range of Rs.7 lakhs to Rs.15 Lakhs. Analysts are expecting a healthy EBITDA of 13.8% in the upcoming years. The stock is yet to report its Q4 earnings. The street would be waiting with good expectations from the Company’s Q4 FY 2023-24 earnings. The stock currently trades at Rs.2196 a piece on NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.