M&M Q3 Results Review - Inline; Core Tractor Ebit Remain Healthy: Yes Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Yes Securities Report.Mahindra and Mahindra Ltd.'s Q3 FY24 operating performance was in-line. Ebitda grew 15% YoY (5.6% QoQ) at Rs 32.4 billion (in-line) was led by ~60 basis point YoY (+20bp QoQ) expansion in gross margins at 24.6% (in-line) and continued cost control. This led to Ebitda margins at 12.8% (-20 bp YoY/ +20 bp QoQ, in-line). However, lower other income at Rs 7.4 billion (estimate: Rs 11 billion) lead to adjusted profit after tax miss at Rs 24.5 billion (estimate ~Rs 27.3 billion, +14% YoY). Adjusted for one-off of ~70 bp due to world cup sponsorship expense, farm segment Ebit remained flat QoQ at 16.2% (versus 15.5% reported). We reckon, margins for near term likely to contract led by decline in farm segment contribution in revenue mix With ramp-up in supplies, auto order book declined to ~226,000 as of Feb 01, 2024 (versus 286,000 units as of November 2023 and 292,000 as of May-23). The management indicated healthy demand for premium products continues to prevail..We cut our FY25/26 earnings per share by 1-2% each to factor in for lower other income as we were anticipating decline in tractor volumes to come through. While we expect auto business to lead the growth over farm equipment segment, deterioration in the mix would restrict revenue/Ebitda/PAT compound annual growth rate to ~9%/11%/4% over FY24-26E. Implied core price/earning for M&M stands at 12.6 times/11.79 times FY25/FY26E EPS is attractive though. Hence, we maintain 'Add' rating on the stock with revised SoTP based target price at Rs 1,931 (versus Rs 1,997 earlier) on March-26 EPS..Click on the attachment to read the full report:.M&M Q3 Results Review - Operationally In Line; Demand Outlook Positive In FY25: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

M&M Q3 Results Review - Inline; Core Tractor Ebit Remain Healthy: Yes Securities

Growth in SUVs to cushion decline in farm equipment segment, partially

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M&M Q3 Results Review - Inline; Core Tractor Ebit Remain Healthy: Yes Securities

Growth in SUVs to cushion decline in farm equipment segment, partially

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