Mahindra & Mahindra shares jump 6% to hit all-time high; here’s why

Shares of automobile major Mahindra & Mahindra (M&M) rallied nearly 6% to hit an all-time high of ₹1,006.70 on Monday after the company reported better-than-expected earnings for the fourth quarter ended March 2022. The largecap stock breached its previous record high of ₹992 touched on August 30, 2018. The stock has been gaining for the last two sessions and rose 8.3% during this period.

For the January-March quarter of 2022, M&M reported a 427% year-on-year (YoY) surge in its profit after tax (PAT) at ₹1,292 crore, as compared to ₹245 crore in the same quarter last year. Revenue for the quarter jumped 28% to ₹17,124 crore as against ₹13,356 crore in the year-ago period. On the operational front, EBITDA dropped marginally to ₹1,946 crore from ₹1,955 crore in Q4FY21.

For the full financial year, M&M’s net profit jumped 401% to ₹4,935 crore against ₹984 crore in the previous fiscal year. Revenue rose 29% to ₹57,446 crore, versus ₹44,630 crore in the last fiscal. The board of the company also recommended a dividend of ₹11.55 per share of the face value of ₹5 each.

Boosted by strong Q4, M&M shares opened 2.4% higher at ₹976 on the BSE, against the previous closing price of ₹953.20. During the session so far, the stock rose as much as 5.6% to touch a high of ₹1,006.70, driven by strong volume as 2.63 lakh shares worth ₹25.96 crore changed hands over the counter as compared to the two-week average volume of 1.29 lakh stocks. The market capitalisation of the largecap auto stock surged to ₹1.24 lakh crore.

The auto heavyweight traded in a bullish range, moving higher than 5-day, 20-day, 50-day, 100-day, and 200-day averages. The stock has gained 6% in a week, 8.3% in the past one month, and more than 19% since the beginning of the calendar year 2022 (year-to-date). The share has delivered 50% returns to its shareholders as compared to its 52-week low of ₹671 touched on March 8, 2022.

Commenting on Q4 earnings, Anish Shah, Managing Director & CEO, M&M Ltd, says, " Our performance in Q4 and FY22 underscores the resilience of our business model. Despite significant challenges due to various factors like Covid, Commodity prices, semiconductor shortages and the Ukraine conflict, we have delivered strong results at the consolidated level. All of our group companies are well-positioned to capitalize on growth opportunities”

During the March quarter of 2022, M&M sold 1,52,204 vehicles, up 43% from the same quarter of the previous fiscal year. However, tractor sales dropped 23% to 72,058 units as compared to the same quarter last fiscal. The company in its earnings report claimed that it achieved the highest ever standalone revenue for auto and farm segments at ₹55.3k crore for FY22, up 29%.