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

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. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.