Mahindra & Mahindra jumps 2% after CLSA upgrades to outperform, hikes target price

Shares of Mahindra and Mahindra gained over 2 percent as investors cheered a ratings upgrade on the stock.

Global brokerage firm, CLSA, upgraded its rating on the stock to outperform and raised the target to Rs 1,610.

CLSA observed that volume growth for the company is on an uptrend, while the tractor business is seeing strong demand.

Moreover, the SUV business is a drag, but volumes are seeing a recovery on low base. In fact, it expects the upcoming MPV launch to boost FY19 growth.

The stock, the brokerage said, looks attractive after underperforming the Nifty by 13 percent since June.

The company has been in the midst of good news flow, helping the stock rally about 5 percent in the past three sessions.

Recently, it matched the lowest bid price offered by Tata Motors under the largest auction of 10,000 electric cars held last week and will supply 150 vehicles in the first phase, state-run Energy Efficiency Services Ltd (EESL) said.

"ESSL confirms order for Phase 1 of its Electric Vehicle tender Mahindra & Mahindra matches lowest bid price, quoted by Tata Motors," the EESL said in a statement.

Mahindra and Mahindra will supply 150 electric vehicles in the first phase, it said. In Phase 2, 9,500 vehicles will be ordered post Phase 1 deliveries.

Meanwhile, its sales figures for the month of September were also positive. It reported a 49 percent jump in total tractor sales at 45,563 units in September this year.

The company had sold 30,562 units in the same month last year, Mahindra and Mahindra said in a statement.

Domestic sales came in at 44,000 units as against 29,035 in the year-ago month, a growth of 51.54 percent, it added. Export during the month stood at 1,563 units as against 1,527 in the year-ago month, up 2 percent.

At 09:28 hrs, Mahindra and Mahindra was quoting at Rs 1,310.90, up Rs 21.85, or 1.70 percent, on the BSE. It touched an intraday high of Rs 1,315.90 and an intraday low of Rs 1,305.05.