M&M Q4 Profits Rise, But Fall Short of Estimates due to One-Time Loss

The net profit surges 22% to Rs 1,549 Crore, revenue exceeds expectations with 31% growth. In the fiscal year ending in March, the automaker experienced a 34% increase in consolidated revenue, reaching Rs 1.21 lakh crore, while net profit soared by 56% to Rs 10,282 crore.

Mahindra & Mahindra (M&M) has announced impressive financial results for the fourth quarter of fiscal year 2022-23. According to the company's exchange filing, net profit for the quarter ended in March rose by a substantial 22% compared to the previous year, reaching Rs 1,549 crore. This positive outcome, however, fell short of the Rs 1,663 crore consensus forecast predicted by Bloomberg analysts.

The company experienced an exceptional loss of Rs 512 crore due to the impairment of certain long-term investments, which affected the overall profit during the quarter. Nevertheless, M&M showcased strong revenue growth, with a remarkable 31% increase to Rs 22,571 crore, surpassing the forecasted figure of Rs 21,897.5 crore.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) demonstrated robust growth, expanding by 44% to Rs 2,797 crore, in comparison to the estimated Rs 2,797 crore. The EBITDA margin stood at 12.4%, showing a notable improvement from the previous year's 11.2%. However, it slightly missed the estimated margin of 12.8%.

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In terms of consolidated figures, M&M witnessed an 18% rise in net profit, reaching Rs 2,637 crore, and a significant 25% growth in revenue, amounting to Rs 32,366 crore.

The automotive segment of M&M experienced substantial sales growth, with a 21.4% year-on-year increase to 1.89 lakh units, while tractor sales surged by 23.1% to 89,731 units during the quarter. M&M attributed the improvement in operational profits to factors such as volume growth, strategic pricing actions, effective control over fixed costs, and the impact of easing commodity inflation.

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Expressing optimism, M&M stated that they achieved the highest-ever volumes in both the automotive and tractor segments, reflecting the company's strong performance and market presence.

Overall, M&M's Q4 FY23 results demonstrate commendable financial growth, albeit falling slightly short of analyst forecasts. The company's robust revenue and operating profit figures, along with the positive sales performance in the automotive and tractor segments, indicate resilience and a positive outlook for future growth.

-The Economic Times

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