M&M's shares surged to fresh highs. Know why

Shares of Mahindra & Mahindra Ltd., a leading commercial vehicles maker, surged to fresh highs after its quarterly profit beat market's expectation even as sales suffered due to a slowdown in rural demand.

M&M said its first quarter Net Profit fell 7.3 percent to 831 crore rupees compared with the street's estimate of 731 crore rupees. This number versus the year-ago PAT of 896 crore rupees. Sales during April-June fell 4 percent to 9,437 crore rupees from 9,818 crore rupees in the year ago period. Revenue was ahead of forecasts as well.

The company said it saw tractor sales drag owing to the stress in the rural economy but sales of medium heavy commercial vehicles had picked up as the economy showed signs of gaining traction.

M&M gained 33.75 rupees, or 2.4 percent, to 1,431 rupees on the National Stock Exchange, where 17.8 lakh shares were traded by 1:55 pm compared with the 5-day average of 7 lakh shares.

M&M's market capitalisation has jumped 14 percent in the past one year to 88,410 crore rupees.

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