M&M hits high and rolls into red

Mahindra & Mahindra hit a new high today at Rs.1414.80 before coming down to current levels of Rs.1406; profit booking coming in at higher levels.

The stock briefly hit a new high on news that the company plans to invest Rs.4000 crore over the next 7 years at its Chakan plant, taking the total investment in the facility to Rs.8000 crore. The company plans to utilize the money to product development, infra development and capacity expansion as the Govt of Maharashtra conferred the ‘ Ultra Mega Project’ status.

Another reason for the cheer is that there is unconfirmed news that M&M will once again re-enter the marjets of SUVs in USA through its plant in Detroit. The company, two years ago had put this plan on hold but now it plans to revive this plan again, with the second phase of expansion, which will be used for US markets, expected to start in 2016-17.