Mahindra & Mahindra Ltd has joined the coveted Rs 1 lakh crore market capitalisation club, after its share price hit a fresh 52-week high on the BSE on normal monsoon forecast.

India Meteorological Department has forecast that the monsoon this year will be normal, with rainfall of 97 per cent of the long period average (LPA) with an error of plus or five per cent.

If the forecast comes true, it will augur well for the country’s economy, as it will be the third successive normal monsoon year. The country had recorded a rainfall of 97 per cent in 2016 and 98 per cent last year during the season, which runs from June to September.

After opening on a bullish note at Rs 815, M&M stock gained further ground and touched its all-time high level of Rs 819.10, up 2.23 per cent over its previous closing price.

Following the uptick in the counter, the company’s market capitalisation (m-cap) jumped to Rs 1,01,829.91 crore, higher by Rs 2,225.32 crore, from Rs 99,604.59 crore yesterday.

Similarly on the NSE, the stock opened at Rs 816, then jumped 2.16 per cent to Rs 818.80, its 52-week high level.

Expectation of normal monsoon and a shift in government spending towards rural areas bodes well, Goldman Sachs said in a note, maintaining its FY19 real GDP growth forecast at 7.6 per cent.

Another normal monsoon and the government's focus on rural development implies that rural income levels could rise faster in FY19, CLSA said in a note, adding one of the key beneficiaries of this would be Mahindra and Mahindra Ltd .

Following the jump in its m-cap, M&M has joined the ranks of Ultra Tech Cement, Power Grid Corporation, and IndusInd Bank.

(With inputs from Agencies)

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