M&M jumped up today by 10% to hit a new 52-week high at Rs.952.15, with an almost 3-times jump in volumes. It has come off the highs and is now trading at Rs.929 levels, nevertheless up almost 7.5%. Its record high stand at Rs.992, hit on 30^th Aug’18.

The stock jumped up on the back of its very encouraging numbers for Q2FY21. Its consolidated profit after tax or PAT (after EI & NCI) was at Rs 704 crore, up by a huge 252% (YoY).

The 20% growth in tractor volumes at 97,420, the highest ever quarterly growth and 12% jump in  revenue from operations at Rs.21,868 crore helped record this performance.

It also reported its highest ever quarterly PBT and ROCE for Farm, driven by a 400 bps increase in margins.

Growth momentum for the tractor industry was supported by positive sentiment in rural parts of the country, specifically the agri economy which is driven by (i) Very good monsoon (ii) Healthy reservoir levels (iii) record kharif production (iv) good rabi sowing (v) Continued high Central Government spending in Agriculture and Rural Development. On the back of these positive factors, it is expected that tractor demand will remain robust during the coming quarter as well.

For Auto, with many key indicators showing positive momentum, calendar year 2021 has started with strong momentum. However, some significant challenges do exist especially on the supply side and commodity prices.