M&M stock price hits red signal

The moods on the counter of Mahindra & Mahindra are not very optimistic. The stock price is down 5% at Rs.1224.85 and this is after slumping over 6% to an intra day low to Rs.1210.80.

The market is nervous – what will the Supreme Court decide today on the issue of banning diesel cars in Delhi? Today is the D-day when the judgement is expected to come on the decision to ban registering diesel SUVs and luxury cars with an engine capacity of over 2,000 CC in Delhi to curb air pollution.  There is already a temporary ban on registering diesel vehicles in Delhi till the 6th of Jan.

Today’s decision, banning registration of SUVs and luxury cars running on diesel could be in place for 3-4 months and will apply to all of the National Capital Region.

This could have a considerable impact on M&M’s earnings are Delhi is one its biggest market for these vehicles; more significantly, most of M&M’s models do not have a non-diesel variant.