Shares of Mahindra & Mahindra (M&M) gained 7% to hit an all-time high on Thursday after the automobile-to-services conglomerate reported a 61% jump in its third quarter net profit.

The Mumbai-based automaker's stock opened at ₹1,683.10 before hitting a 52-week high of ₹1,777 in intraday trade on the BSE. The company's market cap increased to ₹2.20 lakh crore.

The rise in Mahindra stock price comes as the margin from the auto business increased to 8.3% in the quarter ended December 31, 2023, from 6.6% in Q3 FY23. Margin from tractors, however, declined due to lower volumes.

In the auto business, Mahindra expects its utility vehicle sales to grow faster than the industry in the mid-to-high teens.

The average bookings continue to be at about 50,000 per month because the delivery rate has gone up, says Rajesh Jejurikar, executive director and CEO (Auto and Farm Sector), M&M.

“Over a period of time, we want to be in a situation where customers have to wait less for our products. From where we are now, growth is going to come from customers being able to access the products easily,” Jejurikar says, adding that future growth is going to come from being able to deliver cars in a reasonable amount of time. The rear-wheel drive variant of Thar has the longest waiting period around 8 months.

Mahindra plans to start production of its ‘born electric’ SUVs (sport utility vehicles) in the later part of the calendar year. The carmaker has no plans to reduce prices of its electric vehicle XUV 400 even though rivals including market leader Tata Motors and MG Motor India have slashed EV prices amid falling lithium-ion battery rates.

Mahindra, however, expects the next few months to be flattish from a volume standpoint. “The XUV300 is going through a ramp down to prepare for a mid-cycle enhancement. So we would see volumes coming down on that product till we are ready for the changeover,” Jejurikar says.

In the farm business, Jejurikar says Punjab and Haryana have been the fastest growing states. “The real stress we have seen is in Maharashtra, Andhra Pradesh, Karnataka, Telangana which have seen double-digit degrowth,” he says.

The government’s spending on agriculture and rural development remained weak in the third quarter of the ongoing fiscal, the company says. Erratic distribution of rainfall adversely impacted kharif output, affecting farm equipment sales, it adds.

"We continue to meet our objectives of 18% RoE and value creation from capital allocation actions. It has been a good quarter with multiple business showing growth momentum," says Manoj Bhat, group chief financial officer, M&M.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.