Mahindra & Mahindra continued on its recent uptrend and there's some anticipation in the market that the company's JV MBT is in for a positive development.

The scrip of the tractors and utility vehicles maker edged up 1.4% to Rs 107 on BSE in morning trades on Monday. Around 40,000 Mahindra & Mahindra shares changed hands on BSE so far.

The scrip has been rising on a sustained basis of late - 11.3% to its current level from Rs 96.10 on 30 January 2003. The counter witnessed a major rally a few months ago - from its low of Rs 79.70 on 25 October 2002.

The market has it that some development is on the cards at the company's joint venture Mahindra British Telecom. The stock is also moving up on expectations that the forthcoming budget may reduce excise duty on cars and utility vehicles from the existing 32% to anywhere between 24% and 27%.

MBT, the 57:43 software development venture between M&M and British Telecom, is currently believed to be on a hiring spree. British Telecom is its largest customer and contributes more than 70% of its overall revenues.

For January 2003, M&M recorded a 16.4% growth in vehicle sales to 11,972 units. Sales in the auto division, which comprises mainly utility vehicle, rose by 43% to 9,263 units. Tractor sales fell by 29% to 2,709 units.

For the third quarter ended 31 December 2002, M&M registered a net profit of Rs 30.78 crore, a growth of 16%. Top line increased by 5% to Rs 960 crore (Rs 9.6 billion).

The company's automotive sector continued to turn out impressive sales growth and the farm equipment sector retained its leadership position in the market although its sales were affected due to the downturn in the industry. The company continued to to well in utility vehicles and large three-wheelers. This was mainly due to the performance of M&M's recent introductions like the Scorpio, the Maxx, the Marshal Royale and the Bolero Camper. The company's market share in the utility vehicles increased from 51.3% in Q3 last year to 54.0% in the current Q3. M&M sold 13,700 units of UVs during the quarter, up15%.

During the quarter, the company continued with its initiatives for correction of pipeline inventories in FES. The company also retained its leadership position in the market with a share of 28.4 %. In the tractor segment, the company plans to set up a fully-owned subsidiary in Europe for the tractor division of the company. The decision to set up Mahindra Europe follows the successful entry of Mahindra tractors in the US and South East Asian markets.

M&M has put in bids to acquire Punjab state government's stake in tractor major Punjab Tractors. If M&M, a leading player in the tractor industry, is able to acquire PTL, it would make PTL a leading player in the tractor sector in the north. However, the company would be required to shell out a substantial amount to acquire PTL as a number of companies including foreign entities are vying for PTL.

In the utility vehicles sector, M&M is scouting for partners in China and in Russia to locally assemble the Scorpio, its sports utility vehicle. The company is planning to conduct a study in China to evaluate the prospects of the vehicle, and is subsequently planning to tie up with a local manufacturer that will assemble Scorpio kits exported from India.

BSE code: 500520