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Mahindra & Mahindra share price rises most on Sensex, Nifty despite loss in Q4; here's why

Mahindra & Mahindra share price became top gainer on Sensex and closed 7.22% or Rs 34 higher at Rs 508.70. On Nifty, the share was top gainer rising 7.57% to Rs 510

Aseem Thapliyal | June 12, 2020 | Updated 18:47 IST
M&M share rises most on Sensex, Nifty despite reporting loss in Q4; here's why
Mahindra & Mahindra share price opened with a loss of 2.41% at Rs 463 against previous close of Rs 474 on BSE

Mahindra & Mahindra share price closed higher today despite the auto firm reporting Rs 1,754 crore consolidated net loss in Q4. The loss occurred after the firm recognised impairment of certain assets to the tune of Rs 1,782 crore and recorded them as exceptional items in the consolidated statement of profit and loss. The impairment is not a cash loss for the firm but an adjustment in the book value of assets in line with their market value.

Without exceptional items, the firm would have logged a net profit of Rs 28 crore in Q4.   It recorded Rs 915 crore profit in Q4 of 2018-19. The firm also managed to increase its market share in the domestic tractor market to 39.1 per cent in the fourth quarter, a growth of 3.7 per cent over the corresponding quarter last year.

This helped the stock become top gainer on Sensex and closed 7.22% or Rs 34 higher at Rs 508.70. On Nifty, the share was top gainer rising 7.57% to Rs 510.

The stock opened with a loss of 2.41% at Rs 463 against previous close of Rs 474 on BSE. The large cap stock touched an intraday high of Rs 512.5, up 8.02% during the session. The stock trades higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The large cap stock has gained 30% in a month. However, it has lost 20% in one year and lost 4.28% since the beginning of this year.

M&M reports Rs 3,255 crore loss in Q4; FY20 profit dips 86% to Rs 740 crore

Market cap of the firm rose to Rs 63,241 crore on BSE. Total 5.90 lakh shares changed hands amounting to turnover of Rs 28.74 crore.

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Coronavirus lockdown impacted the performance of firm in Q4. "Automotive industry performance for Q4FY20 was a reversal in trend compared with from Q3FY20, when some green shoots were seen in the economy and the consumer sentiment," the company said.

"The lockdowns to contain the spread of the coronavirus have curtailed both supply and demand, the company said. "Added to this, a combination of lower incomes and heightened uncertainty has added to the drag on consumer spending and business investment," it added. As restrictions ease, and the economy at large, adapts to operating and living in a post-COVID era, it is expected that there will be a gradual recovery in the second half of the fiscal, the company said.

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