Mars, Incorporated Stock Declines 2% Amid Beating Sales Projections and Elevated Crude Oil Prices

Mahindra & Mahindra Ltd Shares Fall 2% Amid Rising Crude Oil Prices

Mahindra & Mahindra Ltd (M&M) shares declined more than 2 percent in trade on Monday, despite the company reporting better-than-expected sales for May. The weakness in the stock was largely attributed to global cues after crude oil prices moved higher.

Brent crude rose 2.4 percent to USD 93.3 per barrel amid concerns over a lack of progress in US-Iran negotiations. Higher crude oil prices are seen as negative for automobile manufacturers as they can increase input and logistics costs and may also affect consumer demand through higher fuel expenses.

In contrast to the decline in its stock price, M&M reported sales figures that exceeded market estimates across both segments. The company's automotive division recorded total sales of 99,636 units in May, higher than the CNBC-TV18 poll estimate of 96,400 units.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The company also reported strong sales in its farm equipment business. Domestic tractor sales stood at 47,845 units in May, up 23 percent from 38,914 units in the corresponding month last year. Total tractor sales, including domestic and exports, stood at 49,695 units during the month, compared with 40,643 units in May last year.

Exports also rose to 1,850 units from the year-ago period. The company's farm equipment business reported a high growth in sales, driven by the timely completion of Rabi harvesting and favourable terms of trade for farmers.