M&M, Ashok Leyland, Oil India, AGS Transact Technologies Q2 Results Review: HDFC Securities

HDFC Securities Institutional Equities

Mahindra and Mahindra Ltd. - M&M’s Q2 adjusted profit after tax, at Rs 23.4 billion, came in above our estimate of Rs 19.5 billion, primarily due to higher than-expected other income. Ebit margin for auto and farm equipment segment segments both improved by 40 bps QoQ to 6.1% and 16.4% respectively. M&M has gained market share across its key categories in H1.

Ashok Leyland Ltd - Ashok Leyland’s Q2 profit after tax, at Rs 1.91 billion, was in line with our estimate. Margin improved 210 bps QoQ to 6.5% and was driven by price hikes and operating leverage benefits (volume up 14% QoQ). Ashok Leyland has done well so far in H1 and its market share in the medium and heavy commercial vehicle goods segment has improved to 32.3%. However, it has lost 100 bps market share in light commercial vehicle goods.

Oil India Ltd. - Q2 FY23 revenue/Ebitda/adjusted profit after tax stood at Rs 58/18/17 billion, above our estimate, owing to lower-than-expected statutory levies and higher other income. Oil and gas production broadly came in line.

AGS Transact Technologies Ltd. - AGS Transact reported lower-than-expected revenue and margin performance but new deal wins improve growth visibility for H2. The revenue growth was impacted by the decline in ATM management and banking automation solution revenue, offset by strong growth in digital and other automation services (retail cash machines).

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