Mahindra & Mahindra Q2FY25 First Cut – Robust growth on all counts; SUV demand continues to drive growth

Mahindra & Mahindra Q2FY25 First Cut – Robust growth on all counts; SUV demand continues to drive growth

– Company’s standalone revenue recorded double-digit growth of 12.3% YoY and single-digit QoQ growth of 6.6%, totalling Rs. 28,919 crores, beating the market estimates of Rs. 27,063 crores.
– The company recorded double-digit revenue growth  Revenue growth was driven largely by healthy volume sales during the quarter (the company outperformed the industry). Tractor sales were largely subdued due to the seasonal effect.
– Mahindra and Mahindra’s EBITDA increased by 28% to Rs. 5,270 crores compared to Rs. 3,551 crores posted in the same period last year. The margins stood at 18.2% (up 130 bps YoY / up 305 bps QoQ) during the quarter.

– M&M reported a net profit of Rs. 3,841 crores (up 13.2% YoY / up 47.0% QoQ), surpassing the market estimates of Rs. 3,564 crores. The PAT margins also remained largely flat on a YoY basis while exhibiting a robust expansion of 365 bps sequentially.
– The company posted its highest-ever quarterly volumes, at 231k, on the back of sustained SUV demand in the market, which was further augmented by the new launches during the quarter. UV volume stood at 136k.
– The company maintains its leadership position in the SUV, LCV, Tractor and e3W market, expanding its share by 190 bps, 260 bps and 90 bps, respectively.

Views Of Sagar Shetty, Research Analyst, StoxBox :
Mahindra & Mahindra Ltd registered solid financial performance during the quarter, maintaining a strong market presence across segments. The demand for UVs continues to remain strong, contributing to its healthy revenue growth, while margin expansion continues as a result of improved operational efficiency. The tractor segment also remains in favour of the company despite the rainfall effect during the quarter. Going forward, visible green shoots are expected in the farm industry, primarily fuelled by a healthy rainy season and expected rural development. We also expect healthy growth in the UV segment, as consumer preference remains biased. Additionally, with two new launches in the EV segment, the company is expected to capitalize on the growing market trends. Overall, with the expected bounce in the tractor segment in H2FY25 and its resilient market position despite the slowdown in the PV segment, we believe that the company is poised for solid growth going ahead. Commentary on its expected capex plans and how the company plans to position its two new launches in the market would be key factors to look after.