Automobile major Mahindra & Mahindra (M&M) reported a 66.9 percent growth in its standalone net profit at Rs 3,451.88 crore during the second quarter of this financial year, on November 10. The company’s Profit After Tax (PAT) during the same quarter last fiscal stood at 2,068 crore.
The sharp growth in profit was on the back of higher volumes as Sports Utility Vehicles (SUV) despatches remained strong fueled by order book execution and improvement in supply chain situation. The open bookings of SUVs stood at 2,86,000 units as on November 1, reflecting sustained demand, as stated by the company.
M&M’s standalone revenue in the quarter ended September 2023 rose 16.6 percent percent to Rs 25,772.7 crore from Rs 22,105 crore in the corresponding quarter of last fiscal year.
Anish Shah, Managing Director & CEO, M&M Ltd. stated that during Q2, operating performance across auto, farm and services was robust. In his view: “Auto rapidly grew to double its operating profit. Farm continues to be resilient despite tough market condition.”
The financial results exceeded analysts’ expectations, as the average estimate of five brokerage firms had said that the company's PAT will grow by over 37 percent year on-year to Rs 2,844 crore. Revenue was expected to grow by 20 percent from a year ago to Rs 24,423 crore in the July-September period, as per the estimates by the same brokerage firms.
At an operating level, the Mumbai-based automaker’s Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) went up by 24 percent to Rs 4,397 crore during the quarter under review from Rs 3,539 crore in the same period last year. Furthermore, the company’s EBITDA margin improved to 12.1 percent from 11.6 percent Year-on-Year (YoY).
M&M stated that its quarterly volumes were the highest ever at 2,12,000 units, up 18 percent on a year-on-year basis. Volumes in the electric three-wheelers segment increased 74 percent. Tractor sales, however, were down by 4 percent to 90,061 units.
Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector), M&M Ltd. stated that it delivered yet another robust performance in this quarter.
"We have maintained our SUV Revenue Market Share at 19.9 percent while further improving our Auto Standalone PBIT margins. In the tractor business, we increased our market share by 150 bps on the back of exciting new launches of Oja, Swaraj Target and Naya Swaraj. Our E-3W business continued market leadership with 61.1percent market share,” said Jejurikar.
M&M revealed that the automotive segment witnessed a 22 percent Year-on-Year (YoY) growth in revenues at Rs 18,405.46 crore during the quarter under review. The segment’s profit jumped 88 percent to Rs 1,662.35 crore from Rs 883.11 crore YoY.
However, M&M’s farm equipment business’ performance was muted as its revenue declined by 0.4 percent to Rs 5,919.50 crore. The segment’s profit also dropped 2.3 percent YoY to Rs 946.36 crore.
On a consolidated basis, M&M’s revenue increased 15 percent Rs 34,436 crore, while net profit dropped 15 percent YoY to Rs 2,348 crore.
Manoj Bhat, Group Chief Financial Officer, M&M Ltd. said, “We have delivered strong H1 F24 operating performance with EPS at Rs 52.4, up 18 percent. With focus on operational metrics and value creation through our capital allocation actions, we continue to deliver RoE greater than 18 percent.”
After the Q2 results were announced, M&M stock price was trading at Rs 1,523.35 apiece on the BSE at 3:23 pm, down by 1.92 percent from the previous day’s close.
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