Utility vehicle maker Mahindra and Mahindra (M&M) will announce its March quarter earnings on May 29. The trend has been weak for M&M for last many quarters and that may continue, feel analysts. According to them, steep decline in tractor volumes and margin pressures may hit profitability again.
Year-on-year numbers are not strictly comparable because of trucks business merger.
Standalone profit after tax is expected to decline 38 percent year-on-year to Rs 556 crore and revenue is seen falling 16.3 percent to Rs 9,200 crore during January-March quarter, according to a CNBC-TV18 poll.
Operating profit may slip to Rs 892 crore from Rs 906 crore and margin may decline 150 basis points to 9.7 percent during the same period.
Consolidated (M&M + MVML) profit is seen declining 42 percent on yearly basis to Rs 560 crore and revenue is likely to fall 24 percent to Rs 8,602 crore in the quarter gone by.
Operating profit during the same period may drop by 38 percent to Rs 980 crore and margin may compress by 280 basis points to 11.2 percent in the quarter ended March 2015.
M&M saw a big decline in its volumes during the quarter. It sold 1.62 lakh units in March quarter, down 15.7 percent compared to 1.92 lakh units sold in the same quarter last year.
Tractors saw steep drop in volumes due to Unseasonal rains and hailstorms affecting farm equipment sales, down 30 percent Y-o-Y at 38,604 units.
Its auto sector continued to see slowdown, impacted by competition as volumes shed 10 percent year-on-year to 1.23 lakh units in March quarter.
M&M has already seen big margin contraction in previous two quarters in both segments, said analysts, adding product Mix has deteriorated with lower tractor share by 1000 basis points and negative operating leverage. This may lead to further deterioration of margins, said analysts.
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