The Mahindra & Mahindra (M&M) stock has been on a downward trend for six straight sessions, leaving investors concerned about what is causing the decline and whether the stock can recover.

Reasons Behind the Decline

Weak Demand in the Electric Vehicle (EV) Segment

• The company’s EV bookings have been lower than expected, raising concerns about its ability to compete in the rapidly growing EV market.
• Investors fear that M&M may be lagging behind competitors in adopting new technologies and expanding its electric vehicle lineup.

Price Cuts in Key Models

• M&M recently reduced the price of its popular SUV, the XUV700, by ₹1.85 lakh.
• While price cuts are often aimed at boosting sales, they can also indicate slowing demand, affecting investor sentiment.

Market-Wide Pressure and Volatility

• The broader Indian stock market has been under pressure, with indices like Nifty 50 and BSE Sensex witnessing declines.
• Global economic concerns, high valuations, and profit-booking by institutional investors have contributed to the bearish sentiment in auto stocks, including M&M.

Profit Booking After Recent Highs

• Before this decline, M&M stock had seen strong gains, leading some investors to book profits, causing short-term selling pressure.
• A correction after a strong rally is a common market trend.

What Lies Ahead for Mahindra & Mahindra?

• Analysts remain optimistic about the company's long-term prospects, especially with its stronghold in SUVs, tractors, and upcoming EV expansion plans.
• The average 12-month target price for M&M suggests a potential upside, indicating that the stock could recover in the medium to long term.
• Investors should monitor key developments, including quarterly earnings, EV sales growth, and overall market trends, before making investment decisions.