Mahindra & Mahindra, the utility vehicle and tractor maker, is expected to show more than 50 percent year-on-year growth in profit for the quarter ended December 2020 driven by operating income and dividend from a group company.
The likely revenue growth of over 15 percent could be driven by tractor volumes and increase in realisation, brokerages feel.
Overall volumes increased by 3 percent year-on-year in Q3FY21 led by 20 percent YoY increase in tractor volumes, though automobile volumes fell by 8 percent YoY.
"We expect revenues to increase by 17 percent YoY led by 13 percent YoY increase in average selling prices (ASPs) and 3 percent YoY increase in volumes in Q3FY21," said Kotak Institutional Equities.
Price hikes and favourable product mix is expected to increase average realisation in Q3FY21, Sharekhan feels.
Kotak expects profit to increase by 93 percent YoY due to 38 percent YoY increase in EBITDA and higher other income due to special dividend paid by Tech Mahindra during the quarter, while Sharekhan sees a massive 78 percent YoY growth in profit.
The EBITDA growth is likely to be driven by a richer product mix (higher mix of tractor segment) and cost-reduction efforts, partly offset by increase in input cost in Q3FY21, said the brokerage, adding margin may expand by 271 bps YoY.
According to Sharekhan, EBITDA margin could improve by 304 bps driven by higher share of tractors, where M&M makes higher margins versus its automobile segment.
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