Mahindra & Mahindra (M&M) share price gained over 3 percent on Wednesday after the domestic auto major announced a hike in prices of its passenger and commercial vehicles across models.
In an exchange filing, the auto major said that effective January 1, the company will increase the price of its range of passenger and commercial vehicles, across models.
“This has been necessitated due to the increase in commodity prices and various other input costs, it added. Details of price increase across different models will be communicated in due course,” it said.
Global research house Nomura maintained a 'buy' rating on the stock with the share price target at Rs 923.
SsangYong, the company's South Korean subsidiary, has defaulted as M&M is committed to not investing. The default indicates that the company was sticking to its commitment and in that sense, we see it as a positive for the company’s shareholders, Nomura said.
The carrying value of SsangYong on the company’s books is to be Rs 126 crore. A write-off might be needed if SYMC files for bankruptcy and share sale doesn’t happen.
The current valuation for the core auto business was attractive, Nomura added.
The stock price of M&M gained 3.8 percent to an intraday high of Rs 745.55 apiece on the BSE. At 10:50 am, the shares traded 3.42 percent higher at Rs 742.85 as compared to a 0.60 percent gain in the benchmark Sensex.
(Edited by : Ajay Vaishnav)