Mahindra & Mahindra Q3 Results Preview: Net profit likely to rise 45% on strong auto volumes

Mahindra & Mahindra is expected to see 45 per cent rise in net profit and 18 pe rcent rise in revenue in its third quarter results, driven by strong performance in the auto segment with strong volumes.

The automaker will announce its results on February 14.

According to the estimates of five brokerages, the company’s standalone net profit is expected to rise 45 per cent YoY to Rs 2,212.46 crore while its revenue may increase by 18 per cent to Rs 25,587.98 crore. While EBITDA margin is expected to decline from previous year by 22 bps to 12.78 per cent, it is expected to expand on quarterly basis.

M&M’s sales volume went up by 11.1 per cent YoY to 3,13,115 units in Q3FY24. Auto sales went up by 20.1 per cent YoY to 2,11,443 units while the tractor volumes declined by 3.9 per cent from the previous year to 1,01,672 units. M&M shares have risen 11% in October to December quarter, which is equal to returns of Nifty 50 in the same period

Analysts are betting on increased volumes in the auto sector to power the growth. Nuvama said the revenue growth is expected to be supported by strong performance in auto segment and better realisations in both auto and farm segments. Motilal Oswal said the auto volumes will be robust due to an improving supply chain. Nomura expects the strong revenue growth to be led by 20 per cent growth in auto volumes.

According to Motilal Oswal, net realisations are expected to rise 6 per cent YoY to Rs 81,440.3 crore.

The tractor segment continues to see weakness and the volumes in the segment have declined. Motilal Oswal attributes this to higher base of last year and uneven rainfall.

Nuvama expects the EBITDA margin to be affected by adverse mix and higher marketing spending which offset the net pricing benefit.

According to Emkay, the rise in EBITDA margin on quarterly basis is due to higher mix of tractors in a sequential basis. Tractor mix in sales volume has increased from 29 per cent in the previous quarter to 32 per cent in Q3FY24.