M&M Readies To Pass Through The Highway To Sensex

lifted 2.44%Mahindra & Mahindra to Rs 765 in afternoon trades on improved buying earlier than its entry into the BSE Sensex from 9 July 2007.

The scrip hit an intraday high of Rs 766 and an intraday low of Rs 747 during the day. On 16 January 2007, it touched a 52-week high of Rs 1002 and a 52-week low of Rs 495.10 on 24 July 2006.

As against the Sensex’ return of 2.38%, the Mahindra & Mahindra (M&M) stock slumped 0.81% over the last one month to 4 July 2007. The scrip had underperformed the market over the past quarter, benefiting 4.65% compared to the Sensex’s rise of 15.74%.

On 13 June 2007, the share price had climbed from Rs 685.85 to Rs 737.70 on 25 June 2007. It had slumped from there to Rs 707 on 28 June 2007, before getting ahead to Rs 746.75 on 4 July 2007.

Today, there were 1.62 lakh shares on the BSE counter. During the last four months, the scrip showed an average daily volume of 2.01 lakh shares. At present, the company’s equity is Rs 245.50 crore, with 24.55 crore outstanding shares of a face value of Rs 10.

The existing market price of Rs 765 brushes off its FY2007 EPS of Rs 65.9 (based on consolidated results) by a PE multiple of 11.61. In the market barometer index, the tractor & utility vehicle producer will put back two-wheeler manufacturer Hero Honda.

M&M's farm equipment section continued its tractor sales development in June 2007 from a lofty base in June 2006. It put up volumes of 9,525 as compared with 9,517 in June 2006.

Its sales (April 2007 to June 2007) also indicated an upswing of 1% over the same period last financial. The sales volume posted by the company is 25,232 tractors as compared to 25,042 in the same period in FY 2007.

M&M is a home grown auto major. It manufactures and markets utility vehicles and tractors.