Mahindra & Mahindra, scheduled to report earnings on May 28, is likely to post more than Rs 1,200 crore profit for the quarter ended March 2021, supported by healthy rural demand and richer product mix. The company had posted a loss of Rs 3,255 crore due to write down of investment in Ssangyong in Q4FY20.
According to brokerages, revenue growth could be around 40 percent on the back of strong volume growth on a low base in a year-ago quarter, and operating growth may be more than 60 percent in Q4FY21 YoY. Price hikes and favourable product mix could boost realisation.
M&M reported a healthy 33 percent year-on-year growth in total volumes driven by 58 percent YoY increase in tractor volumes and 17 percent YoY rise in auto volumes.
"We estimate revenues to increase by 43 percent YoY led by 10 percent YoY increase in average selling prices (ASPs) due to richer product mix, and 33 percent increase in volumes in Q4FY21," said Kotak Institutional Equities which sees profit at Rs 1,223.1 crore for the quarter.
Sharekhan expects 43.8 percent YoY growth in revenue and PAT at Rs 1,257 crore in Q4FY21, driven by robust rural demand and richer product mix (high share of tractor sales). ICICI Direct also expects profit at Rs 1,257 crore, which is subject to volatility and is expected to surprise positively as a large part of the investment write offs at the company are behind it.
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At the operating level, Kotak estimates EBITDA to increase by 63 percent YoY led by richer product mix (higher mix of tractor segment), and cost-reduction efforts, partly offset by increase in input cost in Q4FY21. EBITDA margin could improve by 188 bps YoY, said the brokerage.
According to Sharekhan, EBITDA margin could improve by 207 bps YoY driven by higher share of tractors, where M&M makes higher margins versus its automobile segment.