Shares of Mahindra CIE Automotive Ltd rose sharply on Wednesday, pausing their two-run losing run. The sharp rise in the share price came after the auto components supplier posted a nearly 73 per cent rise in its March quarter profit, backed by strong domestic and European demand. The scrip today settled 6.98 per cent higher at Rs 383.70. Mahindra CIE's consolidated profit came at Rs 279 crore in the quarter that ended March 31, 2023, as against Rs 161 crore a year ago. Mahindra CIE is a subsidiary of Spain's CIE Automotive.
European business of the Mumbai-based auto parts supplier registered a revenue of Rs 1,553 crore during the quarter. The company's revenue from India came at Rs 1,468 crore. The company's revenue stood at Rs 2,440 crore in the March quarter, up from Rs 2,061 crore a year earlier.
Technical analysts suggested that the counter may revisit the Rs 415-445 levels in the near term. Support could be seen at around Rs 370.
At today's closing price of Rs 383.70, the stock has slipped 16.98 per cent from its 52-week high of Rs 462.15, a level seen on February 24 this year. Although, it has ascended by 128.39 per cent from its one-year low of Rs 168, hit on May 25, 2022.
Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher, said, "The stock has come out of the rangebound zone where it has resisted for quite some time near Rs 370-375 levels and the breakout indication has strengthened the trend for further rise in the coming days. The initial target would be near Rs 420-425 levels with support now raised to Rs 370."
AR Ramachandran from Tips2trades said, "Strong quarterly results have led to a strong uptrend in Mahindra CIE with strong resistance at Rs 394. A daily close above this resistance could lead to targets of Rs 415-445 in the near term. Support will be at Rs 369."
Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "One can buy in the zone of Rs 372-377 with an upside target of Rs 415 and a stop loss would be placed at Rs 355 on a daily close basis."
Sharp stake reduction by M&M
Further, Mahindra & Mahindra (M&M), the second biggest stakeholder in the Mahindra CIE, has sharply reduced its stake in the company to 3.20 per cent from 9.25 per cent earlier, BSE data showed.
That said, the automotive company counts Maruti, Tata-Jaguar Land Rover (JLR) and Renault among its customers.
Meanwhile, Indian equity benchmarks extended their gains today amid volatile trade, helped by buying in consumer goods, automobiles, banks, financials and technology stocks.
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