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M&M Q1 preview | Net profit to grow 82% YoY led by strong farm equipment business

The strong volume performance and price hikes undertaken by the company will reflect in a sturdy operating show for the June quarter.

Mumbai / August 05, 2022 / 08:23 AM IST
 
 
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Mahindra & Mahindra Limited is expected to report strong earnings for the quarter ended June led by its farm equipment business.

The tractor maker is likely to report an 82 percent year-on-year rise in net profit to Rs 1,556 crore for the quarter ended June, according to an average of estimates from six brokerages polled by Moneycontrol.

The manufacturer of the Scorpio SUV will announce its June quarter earnings on August 5.

Mahindra & Mahindra’s revenue from operations are likely to jump 69 percent on a year-on-year (YoY) basis to Rs 19,877 crore in the reporting quarter led by surge in volumes in the farm equipment business.

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Brokerage firm Choice Broking expects the company's tractor business to report a 65 percent YoY in sales during the quarter while the automotive segment could see a more moderate 5 percent increase in the revenues.

Overall, M&M’s volumes are likely to have increased 18 percent on a sequential basis reflecting the strong pick-up in demand in both the tractor and automotive segments, brokerage firm Nomura India said in a preview note. The success of the company’s Thar model as well as other sport utility vehicles have improved the outlook for the automotive business over the past 12 months.

The strong volume performance and price hikes undertaken by the company will reflect in a sturdy operating show for the June quarter. Analysts expect M&M’s operating profit to rise 53.7 percent on-year to Rs 2,507.7 crore in the reporting quarter.

On the margin front, however, analysts believe the company will likely see a 98 basis points on-year decline to 12.9 percent owing to higher raw material prices in the automotive segment. On a sequential basis, M&M’s operating margin is expected to expand 152 basis points.

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Chiranjivi Chakraborty
first published: Aug 4, 2022 11:59 am