First Cut | Decent showing by M&M in Q3 FY19; accumulate for the long-term

Mahindra XUV300 | Rs 8.3 lakh | The Mahindra XUV300 also managed to bag the best -selling compact SUV in May. This is at a time when the restriction were just easing off and when you expect the usual market leaders like the Maruti Suzuki Vitara Brezza and the Hyundai Venue to keep the lead.

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26 Aug, 2025 12:21

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Nitin AgrawalMoneycontrol Research

Subdued consumer sentiment in the automotive segment, led by multiple macroeconomic challenges and increasing cost of total ownership on the back to rising interest rate and non-availability of retail finance, impacted the performance of Mahindra & Mahindra (M&M).

However, farm equipment segment (FES) saw strong demand, led by three consecutive years of an almost normal monsoon, continued government focus on agricultural and rural development and sustained investment in infrastructure and road projects.

Net revenue grew 12.2 percent year-on-year (YoY) growth on overall volume growth of 9.6 percent. FES segment posted a very strong YoY volume growth (13.1 percent), whereas automotive segment remained flat.

Earnings before interest, tax, depreciation and amortisation (EBITDA) margin contracted 151 basis points (100 bps=1 percentage point). The contraction was on the back of a significant rise in raw material (RM) prices and cost involved in the launch of new models. Automotive and FES segment earnings before interest and tax (EBIT) margin contracted 258 bps and 129 bps, respectively.

The stock is worth accumulating for long-term investors as its strong leadership in FES, revival riding on rural growth and a slew of new launches provide earnings visibility.

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