M&M Q1 PAT seen up 3.5% at Rs 582cr YoY

Mahindra and Mahindra (M&M) is expected to report a 3.5% growth (YoY) in profits for the first quarter of FY12. During the period, profit after tax of the company is likely to go up to Rs 582 crore as against Rs 562 crore in the corresponding quarter last fiscal. 

Revenues are seen going up 28% to Rs 6,588 crore from Rs 5,159 crore year-on-year.

Operating profit margin is likely to improve at 13% in the April-June quarter as against 15% in same quarter the previous year.

 What to watch out for :

* Volume growth of 22% overall (auto sector up 23% YoY and tractors up 20%) to drive revenue growth
* Despite volume growth, raw material pressure to impact margin and restrict PAT growth
* However, EBITDA margins are likely to be maintained at 13.2% levels on account of better product mix in favour of tractors (Tractors accounted for around 38.7% of overall volumes during the quarter as against 36.6% in Q4FY11)
 * Realizations are likely to improve by 4.3% YoY (around 0.8% QoQ), driven by price increases of 2% in the auto segment and 3% in the farm equipment segment in April 2011.
* Volume growth will continue to be very strong as full benefit of the 9 launches in FY11 and 8 new launches in FY12 to come in FY12