M&M Q4 net profit rises 32% to Rs 2,038 cr, declares Rs 21.10 dividend

During the quarter ended March 2024, M&M's automobile segment volumes were at 2,15,280 units, up 14 percent YoY. Its farm equipment segment sold 71,039 units of tractors during the same period, down 20 percent YoY.

Mahindra sold 27.2 percent more SUVs in the quarter from a year earlier.  The company's automotive business brings in almost two-thirds of total revenue and includes the sale of commercial vehicles and SUVs such as Scorpio and Thar.

Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector), M&M Ltd. stated that the company continues to be #1 SUV player by revenue and gained 3.5 percent market share in LCVs < 3.5T category. It has also improved Auto Standalone PBIT margin by 190 bps during this period. In tractors, the company achieved a market share of 41.6 percent, a gain of 40 bps during FY24, and improved core tractor PBIT margins by 30 bps.

"Our farm machinery segment continued to have robust revenue growth of 32percent, " said Jejurikar while adding, "We will launch 9 SUVs, 7 EVs, 7 LCVs by 2030."

Meanwhile, the Mumbai-based automaker said its board approved dividend of Rs 21.10 per equity share of Rs 5 face value.. The record date for the dividend is July 5, 2024, and the dividend will be paid after July 31, 2024.

"Our disciplined capital allocation and sharp focus on operating metrics helped generate record cashflows in FY24. We also repaid debt of Rs 3,100 crore and delivered RoE of 18.4 percent," said Manoj Bhat, Group Chief Financial Officer, M&M.

The results surpassed analysts expectations as the Moneycontrol poll of six brokerage estimates forecast that M&M’s Q4FY24 net profit will rise to Rs 2,026 crore, up 2.5 percent from the year-ago period. It predicted that the company’s revenue from operations will increase by over 7 percent to Rs 24,182 crore from the same period last year.

Talking about capex plans for the next fiscal, Shah said, "We will deploy Rs 37,000 crore from FY 2025-27, a major chunk will be spent on the automotive category. We will not ignore ICEV and a major chunk of our capex will be spent on that segment in the automotive segment."

EV Investment

Meanwhile, the board of directors of M&M has approved an investment of Rs 12,000 crore in its electric vehicle (EV) unit Mahindra Electric Automobile Ltd (MEAL), over a period of next three years up to March 31, 2027.

The company stated that it anticipates to "sufficient operating cash" to satisfy all its capital investment needs and are not looking to raise additional capital.

As  result, M&M and British International Investment (BII) have agreed to extend the timeframe for the final tranche of BII’s planned investment of Rs 725 crore. So far, BII has invested Rs 1,200 crore and Temasek has invested Rs 300 crore so far in MEAL. Temasek will be investing the balance Rs 900 crore as per the agreed timelines.

M&M's shares closed 3.98 percent higher on the NSE at Rs 2,393.90 apiece.