Mahindra & Mahindra Set for Strong Q2 Earnings Driven by Auto Sales Surge, Tractors Pose Challenge

Leading car and tractor manufacturer Mahindra & Mahindra is poised to announce robust second-quarter earnings, buoyed by stellar performances in the automobile segment, while grappling with challenges in tractor sales. The company is scheduled to unveil its financial results for the September quarter today.

Analysts anticipate a substantial year-on-year surge of over 37% in Mahindra & Mahindra's net profit to reach Rs 2,844 crore, based on the consensus of five brokerages. Revenue is expected to witness a significant 20% growth from the corresponding period last year, totaling Rs 24,423 crore in the July-September quarter. Nomura, a prominent brokerage house, forecasts an expansion of the EBITDA margin by 79 basis points.

The strong performance in the auto segment is anticipated to be a primary driver of Mahindra & Mahindra's positive Q2 results. However, subdued tractor sales are expected to temper overall gains. Kotak Securities analysts predict that the tractor segment's revenue will likely remain flat compared to the same period last year.

Also Read: West Bengal Launches Helpline for Potato Farmers to Lodge Fertilizer Complaints

Despite an anticipated growth in the EBITDA margin for July-September compared to the previous year, most analysts project a sequential decline. Nomura suggests that a weaker segment mix, excluding the auto segment, may contribute to a quarter-on-quarter decrease in Mahindra & Mahindra's EBITDA margin. Kotak Securities concurs, predicting an overall decline in the EBITDA margin by 60 basis points.

Also Read: Garuda Aerospace to Open 400 Retail Drone Showrooms in 2024, Aims to Boost Agriculture Sector

Kotak Securities further projects an improvement in the auto segment EBIT margin to 8% in Q2FY24 from 7.5% in the previous quarter. However, the tractor segment's EBIT margin is anticipated to decline by 10 basis points due to negative operating leverage and a higher mix of farm implements, partially offset by favorable raw material conditions.

As of 2:57 pm, Mahindra & Mahindra's stock was trading at Rs 1,546 on the National Stock Exchange, reflecting a 3.92% increase from the previous close. While the stock experienced a nearly 2% dip in the past month, it boasts an impressive 11% gain over the last year. Investors and industry experts await the financial disclosure later today, anticipating insights into the company's performance and strategies amid dynamic market conditions.

Also Read: Maharashtra to Provide ₹1,700 Crore Crop Insurance to 35 Lakh Farmers This Diwali