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M&M shares riding high on fall in metal prices; should you buy?

M&M shares riding high on fall in metal prices; should you buy?

M&M stock touched an all-time high of Rs 1,138.80 today, rising 3.06 per cent against the previous close of Rs 1,104.95 on BSE.

M&M  stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. M&M stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Shares of Mahindra & Mahindra  (M&M) hit their all-time high today amid positive sentiment arising out of a fall in metal prices and likely impact of Scorpio N sales on the bottom line of the firm.  A fall in the prices of metals such as steel and aluminium, which are used as key inputs for production, have raised the prospects of improved profit margins for the Anand Mahindra-led auto company.

The large cap stock touched an all-time high of Rs 1,138.80, rising 3.06 per cent against the previous close of Rs 1,104.95 on BSE.

M&M stock is trading higher than 5-day, 20-day, 50 day, 100-day and 200-day moving averages. The share has risen 35.13 per cent since the beginning of this year and zoomed 45.53 per cent in a year.

Total 1 lakh shares of the firm changed hands amounting to turnover of Rs 11.30 crore. Market cap of the firm rose to Rs 1.40 lakh crore.

ALSO READ: Mahindra launches its biggest, most powerful Scorpio-N starting at Rs 11.99 lakh

Here's a look at what experts said about the prospects of the stock:

Tirthankar Das, Head of Technical Research, Ashika Group

"The rally since the start of the CY22 was linear with sequential decline in between not extending beyond 38.2 per cent retracement which signals strength and a robust price structure. The strong up trend forming higher peak and higher trough in all time frame is at the vicinity of the bullish channel line. Currently, it seems the stock is trading at its 4th leg of the pattern, heading towards Rs 1,200 level mark. However, amid such optimism, there is a presence of Class B divergence on the daily 14 periods RSI which are the first signs of price exhaustion. Hence for the trend follower, price sustenance above Rs 1,100 would continue to maintain positive biasness while for medium-term investors a corrective dip towards Rs 1025-1050 should be used as an ideal buying opportunity to ride the next leg of up move towards Rs 1225- Rs 1250."

Watch Video: Mahindra Scorpio N to rule the SUV Market?

Manoj Dalmia, founder and director, Proficient Equities

"Mahindra has been recently launching variants like XUV 300,700 and Scorpio N which are great product launches and have seen good feedback from the customers. XUV 700 saw a 45 per cent MoM growth in sales and is still in demand. The same can be expected from Scorpio which can add to their topline which can affect the stock. The stock is currently trading at Rs 1,130. The current breakout might take it to Rs 1,222 levels. Also the price is above 200 DEMA which is a positive sign. Investors can hold and buy this stock on dip."

ALSO READ: Mahindra XUV700 gets 5-star rating for adult occupants; receives GlobalNCAP’s ‘Safer Choice’ award

Ravi Singhal, Vice Chairman, GCL Securities Limited

"It has some steam left and can reach Rs 1,270. Commodity and crude prices are down, and the monsoon season can bring demand for agricultural products. New product launches are also doing well."

Ravi Singh, vice President and head of Research, Share India

"The auto shares had been subdued in the last quarter due to higher metal prices, chip shortage, supply disruptions and volatile fuel prices. However, now the auto sector is reviving amid cooling off in metal prices especially steel and aluminium and hope of improved profit margins. M&M share is riding high since the launch of its New Scorpio N which offers advanced features at competitive price and is gaining popularity among the customers. The new launches coupled with tractor sales volumes is expected to boost the company's performance. On technical setup, the M&M stock has potential to touch the levels of Rs 1250 - Rs 1280 in the medium term. Investors may hold their positions for the target and good returns."

Pavitraa Shetty, Co-founder & Trainer, Tips2Trades

"After almost 3-4 years of underperformance, auto sector stocks including M & M are rallying well since the past few weeks due to lower raw material costs as metal prices keep falling & petroleum prices are now stable in India. Current levels should be used by investors to book profits in their buy positions.  Rs 980- Rs 990 levels should be used to re-enter fresh buy positions in the coming weeks."