India's largest utility vehicle maker Mahindra and Mahindra (M&M) will declare its second quarter (July-September) results today. According to a CNBC-TV18 poll, analysts feel the trend of June quarter will be continued in September quarter as well, as tractor volumes growth will compensate for slowdown in auto volumes.
Utility vehicle growth slowed down further in the quarter gone by (down 25 percent Y-o-Y) while tractor volumes surprised on the upside with 22 percent growth year-on-year.
Analysts expect profit after tax of the company to fall 5 percent on a yearly basis to Rs 860 crore and revenue to decline 10.5 percent Y-o-Y to Rs 8,780 crore in three-month period ended September 2013.
Earnings before interest, tax, depreciation and amortisation (EBITDA) may slip marginally to Rs 1,103 crore during September quarter from Rs 1,119 crore in a year ago period.
Operating profit margin may expand 120 basis points Y-o-Y to 12.6 percent during second quarter, but sequentially margin may fall 70 basis points.
"Even though the company hiked price prices by 0.5 percent at the beginning of September quarter, poor product mix (Q2 is seasonally weak for quarter) and overall volume degrowth (volume down 10 percent Q-o-Q) should lead to 70 basis points Q-o-Q drop in margins to 12.2 percent," analysts explained.
Volume growth Q2
Total sales volumes dropped 6.7 percent year-on-year to 1.75 lakh units in July-September quarter.
During the same period, auto volumes declined 16 percent to 1.16 lakh units on poor demand while tractor volumes rose 19 percent to 59,264 units.
Utility vehicle sales volume slipped 24 percent, three-wheeler volume was down 7 percent and the pick-up segment volume declined 3 percent Y-o-Y.
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