Mahindra & Mahindra (M&M) is likely to report a 50-70 per cent surge in year-on-year (YoY) net profit on a 60-70 per cent jump in net sales, with improved realisation on price hikes. Ebitda margin may expand sequentially due to price hikes, better mix and scale, said analysts.
M&M logged tractor sales volumes of 1.19 lakh units in June quarter, up 62.6 per cent sequentially, ICICIdirect said, adding that automotive volumes were nearly flat QoQ at 1.53 lakh units. On a sequential basis, the brokerage sees net sales rising 14.9 per cent QoQ to Rs 19,677 crore with automotive average selling price (ASP) seen at at Rs 7.9 lakh per cent unit (up 2 per cent QoQ) and tractor ASPs seen at Rs 6 lakh per unit (up 1 per cent QoQ).
Standalone Ebitda is expected at Rs 2,477 crore with Ebitda margins at 12.6 per cent, up 120 bps sequentially. “This is also driven by higher share of margin accretive tractor sales volume in the overall sales mix, which for the quarter was at 44 per cent against 32 per cent in Q4FY22. Standalone PAT for Q1FY22 is seen at Rs 1,658 crore, up 28.3 per cent QoQ,” it said.
On a YoY basis, Sharekhan expects profit to come in at Rs 1,512 crore, up 61.9 per cent YoY on a 69.6 per cent YoY rise in sales at Rs 19,949.40 crore.
Elara Capital sees profit rising 67.8 per cent YoY to Rs 1,567.50 crore on a 67.9 per cent YoY rise in sales at Rs 19,753.61 crore. YES Securities has a higher profit estimate at Rs 17,00 crore on a 66 per cent YoY rise in sales Rs 19,541.80 crore.
Emkay Global expects M&M to report a 49.7 per cent YoY jump in standalone net profit at Rs 1,397.90 crore compared with Rs 934.10 crore in the year-ago quarter. Net sales is seen jumping 70.60 per cent YoY to Rs 20,068 crore compared with Rs 11,762.80 crore in the year-ago quarter. Ebitda margin is seen at 12.3 per cent, up from 11.4 per cent in March quarter but lower than 13.9 per cent in the year-ago quarter.
“Realisation to improve on account of price hikes; Ebitda margin to expand due to a price hikes, better mix and scale; auto EBIT margin to remain flat despite price hikes, owing to higher input costs and Cafe2 compliance costs; FES EBIT margin to expand due to better scale and price hikes,” it said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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