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M&M Q4 Preview: Volume to drive 7% YoY revenue growth but tractor sales may disappoint

1 week ago 54

Auto major Mahindra & Mahindra (M&M) is expected to report a net profit between Rs 1,777 crore and Rs 2,079 crore for the quarter ended March 31, 2024, according to estimates of a couple of brokerages. While Nomura sees a 7% year-on-year jump in profit after tax (PAT), ICICI Securities estimates a 1% YoY increase.

The company is expected to report a revenue from operations at Rs 24,051 crore according to average estimates of three brokerages, with an expected average rise of 7%. Among brokerages, Nomura sees revenue at Rs 23,943 crore while ICICI Securities pegs it at Rs 23,815 crore. Nuvama, on the other hand, sees the same at Rs 24,397 crore.

M&M had reported a standalone PAT of Rs 1,549 crore and revenue of Rs 22,571 crore in the corresponding quarter of the previous financial year.

M&M will announce its quarterly earnings on Thursday, May 16.

Here's what brokerages recommended:


Nomura

The PAT for the quarter under review is expected around Rs 1,777 crore, up 7% over Rs 1,667 crore reported in Q4FY23. On a sequential basis, it is predicted to come down by 28% versus Rs 2,454 crore reported in Q3FY24. The revenue from operations is seen at Rs 23,943 crore, which will likely be 6% higher on YoY basis while declining by 5% QoQ.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) is expected to go up 3% on a YoY basis to Rs 2,892 crore in Q4FY24. On the QoQ basis, an 11% fall is expected. Meanwhile EBITDA margin may go down by 31 bps in the January-March quarter at 12.1%. Sequentially, a 72 bps decline is envisaged.

Growth in revenue is expected to be boosted by that in auto volumes with a 14% jump, while tractor volumes are expected to decline 20% YoY. EBITDA margin is likely to decline on a weak tractor mix.


ICICI Securities

M&M is expected to report an adjusted net profit of Rs 2,079 crore, up by 1% on YoY basis and down by 15% on QoQ basis. The revenue for the reporting quarter is estimated at Rs 23,815 crore, up 6% YoY and down by 6% QoQ. The EBITDA will likely be at 2,876 crore, up by 3% YoY and down by 11% QoQ.

ICICI Securities remains positive on M&M, arguing that portfolio transition and stronger profitability would likely help re-rate the stock ahead amid the possibility of FY25 being another soft year for the tractor segment.


Nuvama

Nuvama sees revenue at Rs 24,397 crore, which will be 8% up YoY and down by 4% QoQ. EBITDA is estimated at Rs 3,226 crore, up 15% YoY and flat on QoQ basis.

JM Financial

M&M’s auto EBIT margin is expected to be 8.5%, up by 20 bps on QoQ basis, led by a favourable mix and lower marketing spends.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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