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Can M&M Resume Its Uptrend Post Sluggish April Sales Numbers??

Can M&M resume its uptrend post sluggish April sales numbers??

Mahindra & Mahindra (M&M)’s April sales declined about 9% year-on-year (YoY) to 43,721 units, the company said. In the corresponding month a year ago, the company had sold 48,097 units.

Total domestic sales fell about 8% year-on-year to 41,603 units in April. Exports declined 26% YoY with dispatches of 2,118 units last month against 2,880 units in April last year.

Mahindra’s both passenger vehicle (PV) and commercial vehicle (CV) portfolios recorded a decline of 9% YoY in sales in April. While the company reported sales of 19,966 passenger vehicles last month as against 21,927 units in April last year, CV sales stood at 17,323 units last month compared with 18,963 units a year ago.

Utility vehicle segment sales were at 18,848 units as against 20,371 units in April last year, down 7% YoY. In the cars and vans category, M&M sold 1,118 units as against 1,556 units in April last year, a decline of 28%.

Light commercial vehicles (LCV) with gross vehicle weight (GVW) of less than 3.5 tons contributed with sales of 16,284 units in April 2019 as against 17,495 units in April last year, down 7% YoY. Heavy commercial vehicle (HCV) sales fell about 48% YoY to 474 units, the company said.

The company said domestic sales included the sales made by its subsidiary Mahindra Electric Mobility Ltd.

“The ongoing election has subdued the purchase sentiment during April. This, according to us, is a temporary phenomenon. We believe, following the elections, the auto industry will see a revival in consumer demand. Supported by a normal monsoon, we are confident of seeing higher sales in FY20,” said Rajan Wadhera, president, automotive sector, M&M reasoning out the decline in sales.

Technical View

 The 45 degree of the Gann Fan has been acting as a strong resistance for the counter. Last time it hit the 723 levels at the angle , the rise halted and the counter became sideways. The stock again hit the angle around the 990 levels from where a major correction unfolded. Back to back bear candles right on the highs are an indication of weakness. The stock lost nearly 40 odd percent in a matter of six months from the highs. The fall has halted at the Fibonacci confluence zone of 635-639. In the same zone we also have the Gann angle of 1*2 which is acting as a good support. The sideways move after a steep fall is seen as a continuation of the previous fall. Break of the 635 levels will bring in immense selling in the counter as the fib support and the Gann support both will be broken. The next support lies at 524-556 which is the next Fibonacci confluence zone and hence a good support. The moving averages on the RSI have given a negative crossover and that’s again an indication of weakness. The RSI is still above the 40 levels and that’s a tad positive for the counter. The break of the support zone will also push RSI below the 40 levels which will spell weakness. Hence a monthly close below 635 means an immediate fall in the counter.

 

 

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