M&M shares fall over 8% after SUV price cut
Shares of M&M dropped 8.4% following a 10% price cut on XUV700 SUVs, reducing the stock by 6.7% in Nifty. Kotak Securities targets ₹2,950, advising long-term investment. Despite profit booking, analysts foresee no revenue impact, emphasizing a solid order book and growth from February 2024's business strategy execution.
of automaker & Mahindra (M&M) tumbled as much as 8.4% on Wednesday after the company cut the price of its best-selling Sports Utility Vehicle () model, raising some concerns over slowing . said investors need not put lump sum money into the stock at these levels.The stock, which closed 6.7% lower at ₹2,729.9 Wednesday, was the top loser in the benchmark Nifty.
M&M reduced the prices of the variants of their XUV700 SUV by around 10% for a period of four months.
"We saw some profit booking in M&M on account of news flow," said Aamar Deo Singh, senior vice president of research at . "However, slashing of prices has been seen across the board in car companies due to a pile-up of inventories."
AgenciesSingh said investors must buy M&M shares with a long-term horizon or spread the purchases.
The stock has returned 60.27% in 2024 so far, as against the 11.88% gains in the Nifty.
Kotak Securities remains positive on the stock with a target of ₹2,950 and an 'Add' rating, implying an 8% upside from Wednesday's closing levels.
"We do not see any major revenue impact on Mahindra & Mahindra due to the on XUV 700," said Arun Agarwal, vice president of research at Kotak Securities. "The company has a decent order book and their SUV vertical is expected to continue its growth trajectory."
In an exchange filing the company said, "The announced price cut of XUV700 is a continuation of our business strategy execution that was articulated in our 14th February 2024 analyst meeting where we clearly outlined that we have to bring the average price point down to drive growth."
Source: Stocks-Markets-Economic Times
