M&M Q4 Results Review - Reinforcing ICE Focus Along With Niche In Battery Electric Vehicles: Yes Securities

Yes Securities Report

Mahindra and Mahindra Ltd. Q4 FY24 operating performance was better as revenue/Ebitda came in 5%/12% to ours and 4.5%/8% to street. This was led by better than expected average selling price supported by price hikes and favorable mix. Ebitda grew 15.8% YoY (flat QoQ) despite muted volume growth of ~3% YoY/ -8.4% QoQ. This led to Ebitda margins at 12.9% (+50 basis points YoY/ +10bp QoQ, estimate 12%).

The key highlights of the quarter was farm segment margins which expanded ~30 bp at 15.8% (despite ~29.5% QoQ decline in volumes), led by price hikes, benign raw material and favorable mix.

We believe, new launches on ICE and battery electric vehicles, should support volumes and industry outperformance for FY25/26E, at least.

With ramp-up in supplies, order book for existing models at ~171,000 (versus ~226,000 as of Feb 01, 2024, ~286,000 as of Nov-23) plus ~50,000 for XUV 3XO.

The management indicated healthy demand for premium products continues to prevail. However, we see favorable product mix impact moderating as key risk to margins.

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