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Driven by tractor and automobile sales, Mahindra & Mahindra is expected to report strong revenue growth in Q2.
According to analysts, the company saw double-digit growth in its revenue from the automobile and farm segments. Profit after tax during the quarter is expected to be in single digits at ₹3,383 crore.
“Revenue to rise c8 per cent year-on-year (automotive: +c8 per cent y-y; farm equipment sector (FES): +c7 per cent y-y); tractor volumes to rise by c4 per cent y-y, and automotive volumes to improve by 9 per cent year-on-year. EBITDA margin of 13.4 per cent (+223bp y-y, -145bp q-q), supported by higher operating leverage, but offset by lower mix of the higher-margin tractor segment quarter-on-quarter and a seasonally weak quarter for tractors,” mentions BNP Paribas.
Analysts said key areas to watch include the ramping up of utility vehicles and the outlook for tractor demand that will impact future growth.
“A 10 per cent year-on-year increase in revenue to ₹26,815 crore, with improved volumes and realisations in both the automobile and farm segments, is anticipated,” said Nuvama.
M&M had reported a 20 per cent increase in consolidated net profit at ₹3,283 crore for the quarter ended in June, against ₹2,745 crore reported in the same quarter last year. Profit fell 5.3 per cent year-on-year, including exceptional items in the June quarter.
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