Home Auto news Mahindra & Mahindra shares decline following price reduction on top-selling SUV.

Mahindra & Mahindra shares decline following price reduction on top-selling SUV.

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On Tuesday, the company reduced the price of the AX7 variant of the XUV 700 from Rs 21.4 lakh to Rs 19.49 lakh.

Mahindra & Mahindra Ltd. saw a 6% drop in shares on Wednesday after reducing the AX7 variant of the XUV700 from Rs 21.4 lakh to Rs 19.49 lakh. Termed “celebratory pricing” for four months, this marks the SUV’s upcoming third anniversary in the market.

The company’s shares dropped over 6% to Rs 2,930 each, trading 4.01% lower at 9:46 a.m., compared to a 0.24% decline in the NSE Nifty 50. Over the last 12 months, the stock surged 81.01%, with a 60.6% gain year-to-date. Trading volume today is 4.6 times its 30-day average, and the relative strength index stands at 49.27. According to Bloomberg data, 34 out of 39 analysts recommend ‘buy’, four suggest ‘hold’, and one advises ‘sell’. The average 12-month price target indicates an 8.3% upside.

Mahindra & Mahindra Stock Performance

Tata Motors and Mahindra & Mahindra (M&M) have introduced substantial discounts on popular SUV models due to decreased demand and increased inventory. Mahindra is offering discounts exceeding Rs 2 lakh on its top AX7 variants of the XUV700 to mark its approaching three-year anniversary in India, as reported by TOI.

Starting Wednesday, Mahindra’s AX7 range begins at Rs 19.49 lakh, reduced from Rs 21.54 lakh. Mahindra commemorated the production of its 200,000th unit of the model, achieving this milestone within three years of its launch, solidifying its status as a market favorite.

Mahindra & Mahindra
Image Source: Dee Emm

Tata Motors has announced discounts of up to Rs 70,000 on certain models during its ‘King of SUVs festival’, alongside benefits up to Rs 1.4 lakh on both fossil fuel and electric SUV variants. Reports indicate the automaker has adjusted the starting prices of its Tata Harrier and Safari SUVs.

Significantly, these changes follow Uttar Pradesh government’s decision to exempt registration fees on strong hybrid cars, leading to potential on-road price reductions of up to Rs 3 lakh.

Muted sales

India’s auto retail sales saw a minimal 0.73% year-on-year growth in June, attributed to delayed monsoons in specific regions. Passenger vehicle (PV) and commercial vehicle (CV) sales declined by 7.18% and 12.42% respectively month-on-month, indicating subdued market sentiment.

FADA reported that despite increased product availability and significant discounts to boost demand, inventory levels have peaked at 62 to 67 days. Market sentiment remains dampened by a 15% decrease in footfall due to intense heat and delayed monsoons.

In the midst of an escalating SUV price competition, M&M has slashed prices on its XUV 700 AX7 range by Rs 2 lakh, reducing the starting price to Rs 19.49 lakh from Rs 21.4 lakh previously. This “celebratory pricing” initiative will last for four months, aimed at enhancing affordability and delivering exceptional value, according to the company’s statement.

On July 9, auto stocks surged, with Maruti Suzuki rising seven percent following Uttar Pradesh’s decision to waive registration taxes on hybrid cars to promote eco-friendly vehicles. Meanwhile, M&M shares experienced a decline as investors reportedly opted to secure profits.

June car sales were sluggish due to disruptions related to elections and adverse weather conditions such as intense heatwaves and delayed monsoons. Reports indicate that dealers are holding approximately Rs 60,000 crore worth of unsold inventory.

In the last year, M&M’s shares surged 80%, outpacing the Nifty 50 index, which rose 26% over the same period.

(Note: The investment advice on Moneycontrol.com represents the views of individual experts, and users are advised to consult certified professionals before making investment decisions.)

You might also be interested in – Mahindra XUV 3XO garners 50,000+ bookings in under an hour, with deliveries commencing on May 26.

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