M&M Shares Hit 52-Week High
Shares of Mahindra & Mahindra, India's leading tractor manufacturer, have reached a 52-week high as a rural revival fueled by a favourable monsoon forecast has encouraged farmers. This, in turn, has aided the Mahindra & Mahindra stock through a difficult period.
Overall, Indian tractor manufacturers sold nearly 83,000 tractors in May this year, a 47 percent increase over the same month last year, despite a marginal month-on-month decline.
Despite a drop in rabi crop yields, farmers appear to be optimistic in general. This is evident from the rise in agricultural produce prices, which has resulted in an increase in tractor sales.
In addition, the government raised the minimum support price for kharif crops by 6.1 percent, compared to a 3.8 percent increase the previous year. According to Spark Capital analysts, this could result in a nearly 20% increase in net agricultural income. Farmers have also made record fertiliser purchases in April as they prepare for the kharif season. Despite slow monsoon progress, analysts believe that water availability in reservoirs is adequate, encouraging farmers to plant kharif crops early. Analysts anticipate a bumper kharif crop this year.