Q4FY23 Preview: Mahindra & Mahindra: Revenue seen at Rs. 221,846 million, PAT at Rs. 16,560 million

22 May 2023 , 11:06 AM

Result date: 26^th May, 2023

Recommendation: Add

Target price: Rs. 1,360

Mahindra & Mahindra (M&M) posted 21% growth in auto volumes over the year-ago quarter and 8% sequentially. Tractor volumes grew 23% as compared to the year-ago quarter, but fell 15% sequentially. Analysts at IIFL Capital Services expect revenue share of Tractors to be down from 30% in Q3 to 25% in Q4. Overall, revenue growth is estimated at 29.6% over the year-ago quarter.

Operating leverage and price hikes are key margin tailwinds on a sequential basis, while lower tractor mix is a prominent margin headwind. M&M’s Auto EBIT margin could come in at 7.3% and Tractor EBIT margin is seen at 16.0%.

The company’s Profit After Tax or PAT could grow 41.9% as compared to the year-ago quarter.

Important management insights to watch out for:

• Demand trends across markets, product segments
• Margin drivers

	March 2023 estimates	YoY change	QoQ change
Auto volumes	189,227	21.4%	7.5%
Tractor volumes	89,731	23.1%	(15.2)%
Revenue (Rs Million)	221,846	29.6%	2.5%
EBITDA (Rs Million)	28,228	45.1%	0.3%
EBITDA Margin	12.7%	136 bps	(27) bps
Profit After Tax	16,560	41.9%	(23.2)%

Source: IIFL Research