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Q1FY24 Preview: Mahindra and Mahindra: Revenue seen at Rs. 242,178 million, PAT at Rs. 20,778 million

3 Aug 2023 , 10:44 AM

Result date: 4th August, 2023

Recommendation: Add

Target price: Rs. 1,375

Mahindra and Mahindra (M&M) witnessed 21% growth in its auto volumes over the year-ago quarter and a 2% sequential decline in this metric. Tractor volumes were down 3% over the year-ago quarter, but grew 28% sequentially (owing to the seasonality factor). Analysts at IIFL Capital Services expect revenue share of Tractors to be up from 25% in March 2023 quarter to 30% in the June 2023 quarter. The company’s revenue could grow 22.8% over the year-ago quarter and 7.3% sequentially.

Prominent margin tailwinds (sequentially) during the quarter include favorable operating leverage; price hikes and higher tractor mix. Analysts at IIFL Capital Services expect the company’s Auto EBIT margin at 7.5% and Tractor EBIT margin at 18.0%. Overall, the company’s EBITDA margin is seen at 13.5%, up 167 basis points over the year-ago quarter and 111 basis points sequentially.

M&M’s Profit After Tax or PAT could grow 43.8% over the year-ago quarter and inch up 0.8% sequentially.

Important management insights to watch out for:

  • Demand trends across urban and rural markets
  • Outlook on pricing, input costs and margins
 

June 2023 estimates

YoY change

QoQ change

Auto volumes

186,138

21.3%

(1.6)%

Tractor volumes

115,009

(3.0)%

28.2%

Revenue 

242,178

22.8%

7.3%

EBITDA 

32,701

40.1%

16.9%

EBITDA margin (%)

13.5%

167 bps

111 bps

Profit After Tax 

20,778

43.8%

0.8%

Source: IIFL Research

Related Tags

  • M&M
  • M&M Q1
  • Mahindra and Mahindra
  • Mahindra and Mahindra Q1
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