Mahindra Renewables to sell entire stake in 3 arms for Rs 340 crore to CLP

Mahindra & Mahindra on Friday said its wholly-owned arm Mahindra Renewables will sell its entire stake in three subsidiaries to CLP India, a part of Hong Kong-based CLP Group, for nearly Rs 340 crore.

Mahindra Renewables Pvt Ltd (MRPL) has on Friday agreed to sell its entire stake aggregating 100 per cent of the paid-up equity share capital in Cleansolar Renewable Energy Pvt Ltd (CREPL), Divine Solren Pvt Ltd (DSPL) and Neo Solren Pvt Ltd (NSPL), wholly-owned subsidiaries of MRPL, to CLP India Pvt Ltd (CLP), Mahindra & Mahindra said in a regulatory filing.

As per the share purchase agreement, CLP will acquire 96,23,000 equity shares of Rs 10 each in CREPL at a price of Rs 113.11 per share, aggregating to Rs 108.85 crore.

Similarly, it will acquire 1,20,80,000 equity shares of Rs 10 each in DSPL at a price of Rs 104.57 per share, aggregating to Rs 126.32 crore.

CLP will also buy 93,15,000 equity shares of Rs 10 each of NSPL at a price of Rs 112.37 per share aggregating to Rs 104.67 crore, the filing said.

In the fiscal ended March 31, 2019, CREPL had a turnover of Rs 39.15 crore, while DSPL's and NSPL's turnover stood at Rs 54.18 crore and Rs 42.68 crore, respectively.

The transaction is expected to be completed by May 31, 2020.

"Following the sale, MRPL's shareholding in CREPL, DSPL, NSPL would come down to nil and CREPL, DSPL, NSPL will cease to be the subsidiaries of MRPL and consequently of the company," M&M said.

Nifty view & top picks by Prabhudas Lilladher: Buy Mahindra & Mahindra

The Nifty has given a strong recovery during the week, bottoming out near 11,830 levels. With a close above 12,000 levels, Nifty gets its weekly trend turned up. Also, the RSI at 63 levels brings in strength for further upmove. However, the support for the week is seen at 40,370 while the resistance is seen at 41,630 for the Sensex. The weightage among Nifty50 stocks is still tilted more on corrective. Bank Nifty would have a range of 31,370-32,650. Auto and Capital goods look favorable from here on along with Cement sector.

BUY MAHINDRA & MAHINDRA | CMP: Rs 516.20 | TARGET: 590 | STOP LOSS: Rs 490

The stock has witnessed a decent correction from the peak of 621 levels and has bottomed out near 500 levels where there is a strong support. The stock is indicating a bounceback with positive bias. The RSI also has shown a trend reversal from the highly oversold zone and has signaled a buy for further upside levels to attain in the coming days. We suggest to buy this stock for an upside target of Rs 590 keeping a stop loss of Rs 490.

BUY HDFC AMC | CMP: Rs 3,126 | TARGET: Rs 3,700 - 3,800 | STOP LOSS: Rs 2,850

The stock has corrected well from the recent high level of 3,844 and has currently bottomed out near 2,830 levels making a higher bottom formation pattern in the daily chart to imply strength and potential to rise further in the coming days. The chart looks attractive with also the RSI indicator showing a trend reversal signaling a buy. We suggest to buy and accumulate this stock for an upside target of Rs 3,600-3,750 keeping a stop loss of Rs 2,850.

Mahindra & Mahindra nears 52-week low; stock slips 12% in one month

Shares of Mahindra & Mahindra (M&M) slipped 2 per cent to Rs 512 on the BSE on Friday and was trading close to its 52-week low level. The car & utility vehicles maker's stock is less than 2 per cent away from its 52-week low price of Rs 503, touched on August 14, in intra-day trade.

In past one month, M&M has underperformed the market by falling 12 per cent as the company’s tractor sales delivered disappointing performance. In comparison, the benchmark index S&P BSE Sensex was up marginally by 0.33 per cent.

In November, M&M’s tractor segment’s volumes declined 19 per cent to 21,032 units, over the same month previous year. Within tractors, domestic volumes declined 19 per cent to 20,414 units, while exports were lower by 22 per cent to 618 units.

Yesterday, the Reserve Bank of India (RBI) cut the real GDP growth forecast for the second half (October-March) H2FY20 to 4.9 per cent to 5.5 per cent from 6.6-7.2 per cent earlier. Consequently, the real GDP growth forecast for FY20 has also been reduced sharply from 6.1 per cent earlier to 5 per cent (down by 240bp since the Feb'19 monetary policy meet).

While the RBI expects past measures such as monetary easing and the government’s policy initiatives to spur domestic demand, weak domestic and external demand conditions have led to a cut in the growth forecast for FY20.

“Overall, an unexpected status quo confirms that the RBI prioritized rising inflation over grim economic growth. Our estimates suggest that inflation will remain close to or above 5 per cent by Mar’20, implying that a rate cut in the next MPC in Feb’20 is highly unlikely. Further, since our projections suggest that inflation will retreat toward 4 per cent only by Q3FY21, there is a good probability of a prolonged pause over the next 3-4 quarters,” Motilal Oswal Securities said in a note.

M&M consolidated PAT falls 52.56% in June quarter to Rs 894 over weak sales

Mahindra & Mahindra on Wednesday reported a 52.56 per cent decline in consolidated profit after tax to Rs 894.11 crore in the first quarter ended June 30, hit by lower vehicle sales.

The company had posted a consolidated profit after tax of Rs 1,884.66 crore in the same quarter of the previous financial year, Mahindra & Mahindra said in a regulatory filing.

Its total income during the period stood at Rs 26,289.48 crore as compared with Rs 26,260.64 crore in the corresponding quarter a year ago. In the first quarter, M&M said its total vehicle sales stood at 1,23,690 units as against 1,30,484 units in the year-ago period, down 5 per cent.

Mahindra to increase price of vehicles by up to Rs 73,000 from April

Auto major Mahindra & Mahindra (M&M) Thursday said it will increase the price of its passenger and commercial vehicles by Rs 5,000 to Rs 73,000 from April to partially offset the impact of rising input costs.

The price of the company's vehicles will go up by 0.5 per cent to 2.7 per cent from next month due to the price hike, the company said in a statement.

"This year has seen record high commodity price increases. Further there are regulatory requirements effective April 1 that have also led to cost increases. While we have made efforts to reduce our costs, it has not been possible to hold back the price increase," M&M President Automotive Sector Rajan Wadhera said in the statement.

Consequently, the company is taking a price increase from April 1, he added.

The company sells various utility vehicles ranging from newly launched compact SUV XUV300 to premium SUV Alturas G4. M&M also sells various commercial vehicles including Supro and Jeeto in the domestic market.

Earlier this week, French car maker Renault had announced increase in price of Kwid range in India by up to 3 per cent from April.

Last week, Tata Motors had also announced increase in price of its passenger vehicles by up to Rs 25,000 from April on account of rising input costs and external economic conditions.

M&M joins the likes of Toyota and Jaguar Land Rover which have also stated that they would raise price of select models from April.