Here's what to expect from M&M Q3 results

Moneycontrol Bureau

Utility vehicles have continued to accelerate, bucking the overall slowdown in the automobile industry this financial year, and that is expected to boost Mahindra & Mahindra's third quarter earnings. The maker of UVs like Scorpio, Bolero and XUV500 will report its results for the Oct-Dec quarter on Friday.

Analysts on average expect the company to report a standalone net profit of Rs 827 crore, up 25 percent year-on-year, while standalone revenue is seen up 30 percent to Rs 10,892 crore, according to a CNBC Awaaz poll.

"We expect Mahindra & Mahindra to report overall volume growth of 17.1 percent YoY (13.9 percent  quarter-on-quarter), driven by 23.7 percent YoY (5.7 percent QoQ) growth in UVs and pick-ups," said Jinesh Gandhi and Chirag Jain of brokerage Motilal Oswal.

Tractor sales, however, have been sluggish and the analysts expect sales will grow only 2 percent year-on-year.

EBITDA (earnings before interest, taxes, depreciation and amortization) is expected to rise 29 percent year-on-year, while margin is seen up 20 bps to 11.9 percent, according to brokerage Prabhudas Lilladher.

KEY THINGS TO WATCH

-- Automotive volume growth in the quarter (includes UVs and Verito sedan)    -- Performance of new launches like the Quanto mini SUV and Ssangyong Rexton
-- Tractor sales in Oct-Dec
-- The outlook on the road ahead, especially for tractors, in the fourth quarter and FY14
-- New launches planned, especially in the wake of increased competition
-- Updates on its South Korean arm Ssangyong's performance
-- Growth plans overseas
-- The road ahead for medium-to-heavy trucks. M&M recently agreed to acquire partner Navistar's stake in the Mahindra Navistar JV

STOCK TALK

M&M shares closed up 1.3 percent at Rs 896.60 on NSE on Thursday. The stock has gained 3.7 percent since end of September, underperforming the wider auto index, which has gained 5.6 percent and the Nifty index, which is up 4.1 percent.

Prabhudas Lilladher has an "accumulate" rating on M&M, while Motilal Oswal advises a "buy."