M&M Q3 profit after tax seen up 57% at Rs 650 cr

M&M is set to announce its results for the quarter ended December 2010. According to CNBC-TV18 estimates, its profit after tax is expected to go up by 57% at Rs 650 crore from Rs 413.7 crore on year-on-year basis.

Revenues are seen going up by 33% at Rs 5,960 crore in third quarter of FY11 as against Rs 4,479 crore in same quarter the previous year. Operating profit margin is likely to improve at 15.6% versus 14.5%.
 
What to watch for :
-M&M is expected to post overall volume growth of 33% YoY (nearly 8.2% QoQ) in 3QFY11, driven by 35% YoY (nearly 28.1% QoQ) growth in tractor volumes, 23.6% YoY growth (nearly 2.9% QoQ) in UV volumes and 14.5% YoY growth (nearly 21.3% QoQ decline) in three-wheelers
-UV (Xylo, Bolero, Scorpio) and Pick-up (Gio, Maxximo) sales continue to be very strong
-Realization is expected to improve by 3.9% YoY (nearly  1.7% QoQ) due to price increases.
-EBITDA margins are expected to decline by 20bp QoQ (nearly 40bp YoY savings) to 15.6%, due to raw material cost inflation.

Management comments
-Supply-side constraints due to shortage of tyres, fuel injection equipment and castings have begun to ease and will drive volumes in 2HFY11.
-Margins will continue to be under pressure due to raw material hike.
-Launch of global SUV and Ssangyong model to drive UV sales. Integration of Ssangyong and entry into MHCV key moniterables in FY12.
-The management has guided for 14-15% growth in the auto and tractor industry in FY11.
 
Break -up
-Domestic Auto volume up 31.3% at 90205 versus 68679 units
-Exports up 40.2% at 5020 versus 3581 units
-Tractor volume up 35.6% at 55488 versus 40917 units
-Exports up 8.1% at 3120 versus 2886 units