Shares of Mahindra & Mahindra (M&M) jumped 10 percent to hit their upper price band and a 52-week high of Rs 700.75 on BSE in intraday trade on November 18.

                               

The stock gained traction after the company said it will manufacture its new tractor series K2 exclusively at its Zaheerabad facility in Telangana, where it will bring incremental investments of Rs 100 crore and double employment in the plant by 2024.

The new K2 series is Mahindra's most ambitious light-weight tractor programme. It has four platforms and the company will introduce 37 models in various horsepower (HP) ratings for domestic and international markets, including the US, Japan and South East Asia, M&M said in a regulatory filing. Brokerage firm Motilal Oswal Financial Services has a buy call on the stock with a target of Rs 800.

"We upgrade FY21/FY22E EPS by 8 percent/6.5 percent to reflect volume upgrade in tractors as well as tighter cost control. M&M is one of the few auto stocks still trading at a good discount to LPA," said the brokerage.

ICICI Direct, too, has a buy call on the stock with a target price of Rs 760.

"We expect sales, adjusted PAT to grow at 8 percent, 36.2 percent CAGR, respectively, in FY20-23E. Continued demand traction for the tractor segment along with the ongoing focus on responsible capital allocation helps us maintain our constructive stance on M&M," ICICI Direct said.

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