- 15 Feb 2024
- ICICI Securities
MAHINDRA & MAHINDRA REPORTS HEALTHY PERFORMANCE IN Q3FY24
M&M - 3136 Change: -8.70 (-0.28 %)News: At M&M, on the standalone basis, topline for the quarter came in at ₹25,289 crore (up 17% YoY) with automotive segment volumes growing 20% YoY at 2.1 lakh units and tractor sales volume at 1.02 lakh units (down 4% YoY). EBITDA in Q3FY24 came in at ₹3,236 crore with corresponding EBITDA margins at 12.8% (up 20 bps QoQ). Resultant PAT for the quarter stood at ₹2,454 crore (up 61% YoY). Automotive segment EBIT margins improved further to 8.3% (up 40 bps QoQ) while Farm Equipment segment margins declined to 15.5% (down 50 bps QoQ, it includes 70 bps one-time impact of World Cup sponsorship in Q3F24, adjusting for which it stood at 16.2%).
Views: The margin performance at the company was broadly in line with expectations. For FY24E it expects domestic tractor industry to decline by 5% on YoY basis with Q4FY24 decline pegged at 10%. On the SUV side its orderbook stands healthy at 226k units with aspiration to grow mid to high teens in FY25E amidst domestic PV industry growth pegged at <5%. In the SUV space its present booking run rate is still ahead of monthly production capacity. With capital efficiency to the core (RoE at 19% in YTDFY24), the company is well poised for more profitable growth going forward. At the valuation standpoint, it trades inexpensive compared to its peers.
Impact: Positive