Q2FY23 Preview: Mahindra -; Mahindra: Revenue seen at Rs210,161 million, PAT at Rs23,237 million

  • India Infoline News Service |
  • 10 Nov, 2022 |
  • 10:50 AM
Result date: 11th November, 2022
Recommendation: Buy
Target price: Rs1,350

Mahindra & Mahindra (M&M) witnessed surge in auto volume growth (over the year-ago quarter) to 77%, partly due to a low base effect. Sequentially, auto volumes increased 17%. M&M’s tractor volumes inched up 5% over the year-ago quarter, but declined 21% sequentially (partly due to the seasonality factor). Overall, revenue could grow 58% over the year-ago quarter. Share of tractors in total revenue could come down from 34% in Q1FY23 to 26% in Q2FY23.

Fall in commodity prices, price hikes and operating leverage are key margin tailwinds while adverse revenue mix and introductory pricing of Scorpio are key headwinds. Analysts at IIFL Securities estimate M&M’s Auto EBIT margin at 7.1% and Tractor EBIT margin at 16.0%.

The company’s Profit After Tax or PAT could grow 38% over the year-ago quarter.

Important management insights to watch out for:
  • Demand trends across key markets
  • Demand for tractors during the festive season and H2FY23
  • Outlook on input costs, pricing action, margins
Including MVML
September 2022 estimates QoQ change YoY change
Auto volumes 179,683 17.1% 76.7%
Tractor volumes 93,540 (21.1)% 5.2%
Revenue (Rs mn) 210,161 7.2% 58.0%
EBITDA (Rs mn) 25,488 8.9% 53.6%
EBITDA margin 12.1%  19 bps (35) bps
Profit After Tax (Rs mn) 23,237 58.0% 37.8%
Source: IIFL Research

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