WebSify
Follow us on
Mail
Print

M&M falls further on Navistar stake buy

Source : REUTERS
Last Updated: Fri, Dec 21, 2012 10:11 hrs
A customer stands next to a Mahindra vehicle on display inside the company's showroom in Chandigarh

Mahindra & Mahindra shares fall for the second day on earnings concerns, after the automaker said it would buy Navistar International's 49 percent stake in its two joint ventures, in a $33 million deal.

Mahindra automotive president Pawan Goenka told analysts on Thursday that the M&M board has given executives three years to bring the two companies, which build trucks and engines, to profitability.

The two companies had cumulative losses of 6.92 billion rupees as of March 31 this year, Goenka said.

After the management call, Citi estimated no impact on Mahindra & Mahindra's stand alone earnings but warned consolidated profits will be affected adversely as 100 percent of the losses of both entities will now reflect.

Barclays suggests M&M's "immediate task" is to reduce the cash losses and focus on turning around operations as recent trends for medium and heavy duty commercial vehicles point to increasing stress in the industry.

blog comments powered by Disqus
most popular on facebook
talking point on sify finance