Mahindra & Mahindra (M&M) is likely to report a 50-70% surge in year-on-year (YoY) net profit on a 60-70% jump in net sales, with improved realisation on price hikes. Ebitda margin may expand sequentially due to price hikes, better mix and scale, said analysts.
M&M logged tractor sales volumes of 1.19 lakh units in June quarter, up 62.6% sequentially, ICICIdirect said, adding that automotive volumes were nearly flat QoQ at 1.53 lakh units. On a sequential basis, the brokerage sees net sales rising 14.9% QoQ to INR 19,677 crore with automotive average selling price (ASP) seen at at INR 7.9 lakh% unit (up 2% QoQ) and tractor ASPs seen at INR 6 lakh per unit (up 1% QoQ).
Standalone Ebitda is expected at INR 2,477 crore with Ebitda margins at 12.6%, up 120 bps sequentially. “This is also driven by higher share of margin accretive tractor sales volume in the overall sales mix, which for the quarter was at 44% against 32% in Q4FY22. Standalone PAT for Q1FY22 is seen at INR 1,658 crore, up 28.3% QoQ,” it said.
On a YoY basis, Sharekhan expects profit to come in at INR 1,512 crore, up 61.9% YoY on a 69.6% YoY rise in sales at INR 19,949.40 crore.
Elara Capital sees profit rising 67.8% YoY to INR 1,567.50 crore on a 67.9% YoY rise in sales at INR 19,753.61 crore. YES Securities has a higher profit estimate at INR 17,00 crore on a 66% YoY rise in sales INR 19,541.80 crore.
Emkay Global expects M&M to report a 49.7% YoY jump in standalone net profit at INR 1,397.90 crore compared with INR 934.10 crore in the year-ago quarter. Net sales is seen jumping 70.60% YoY to INR 20,068 crore compared with INR 11,762.80 crore in the year-ago quarter. Ebitda margin is seen at 12.3%, up from 11.4% in March quarter but lower than 13.9% in the year-ago quarter.
“Realisation to improve on account of price hikes; Ebitda margin to expand due to a price hikes, better mix and scale; auto EBIT margin to remain flat despite price hikes, owing to higher input costs and Cafe2 compliance costs; FES EBIT margin to expand due to better scale and price hikes,” it said.
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