M&M Stocks Crashes Above 7 Percent After Company Cuts XUV700 Prices

M&M Stock Crash: Mahindra & Mahindra's stock is witnessing a big decline in Wednesday's trading session. From Tuesday's closing level of Rs 2925, the stock has fallen by 7.80 percent to Rs 2697. Currently, the stock is trading at Rs 2714 with a decline of 7.26 percent. Due to the fall in the stock of Mahindra & Mahindra, the Nifty Auto Index is witnessing a decline of 2.13 percent.

Why did Mahindra & Mahindra's stock fall?

On Tuesday, July 9, 2024, Mahindra & Mahindra announced a big price cut on the third anniversary of its best-selling SUV XUV700. The company has cut the prices of its SUV vehicles by about Rs 2 lakh. However, this cut is for a temporary period. The price reduction will be applicable for four months. The price of AX7 Petrol-MT 6 seater has now come down to Rs 19.49 lakh ex-showroom, which was earlier Rs 21.54 lakh. Mahindra & Mahindra announced the price cut on the same day when the news came out that the Uttar Pradesh government has allowed the tax on registration of hybrid cars to be abolished, which will be a big benefit for Maruti Suzuki.

Mahindra under pressure after Uttar Pradesh government's decision!

There is speculation in the market whether Mahindra & Mahindra has reduced the price of its XUV700 under the pressure of Maruti Suzuki's hybrid cars becoming cheaper. Because Maruti Suzuki's hybrid cars will become cheaper by Rs 3.50 lakh, it will have a direct impact on the sales of companies like Mahindra & Mahindra and Tata Motors. On top of that, according to the Federation of Automobile Dealers Association (FADA), dealers have an inventory of vehicles worth Rs 60,000 crore. Whereas the total inventory is Rs 6 lakh to 6.50 lakh crore. There has been a decline in the sales of passenger vehicles in the last few months. After which companies are having to give huge discounts on vehicles.

Investors' returns doubled in one year

This is the biggest fall in the stock of Mahindra & Mahindra in a single trading session. However, Mahindra has given excellent returns to its shareholders in the last three years. The stock has crossed Rs 3000 from Rs 1415 in 52 weeks, meaning the stock has given double returns to investors. But due to the Uttar Pradesh government's decision on hybrid cars and Mahindra & Mahindra's decision to reduce the prices of SUV 700, the shine has disappeared from the stock.

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