Mahindra & Mahindra Q3 Results: Profit Jumps 33% as SUV Demand Surges
Mahindra & Mahindra Ltd. (M&M) reported strong growth in both profit and revenue for the third quarter of the current financial year. The results met market expectations, largely driven by increased car sales following a reduction in GST rates.
Strong Financial Performance
According to a stock exchange filing on Wednesday, M&M’s standalone net profit rose by 33% to ₹3,931 crore for the October-December quarter. This is a significant increase from the ₹2,964 crore reported during the same period last year. The results slightly exceeded the ₹3,885 crore estimated by analysts.
The company also noted a one-time cost of ₹98 crore due to the implementation of New Labour Codes.
Revenue and Sales Growth
Revenue from operations climbed 26%, reaching ₹38,517 crore. This marks a strong recovery after growth slowed in the previous quarter. The jump in revenue highlights a pickup in sales following GST revisions in late September, which led to lower prices for several Mahindra models.
Key Financial Highlights (Year-on-Year):
- Revenue: Up 26% to ₹38,517 crore (Estimate: ₹38,926 crore).
- EBITDA: Increased 20.7% to ₹5,293 crore (Estimate: ₹5,721 crore).
- EBITDA Margin: Slipped to 13.7% from 14.4% (Estimate: 14.7%).
- Net Profit: Grew 32.6% to ₹3,931 crore (Estimate: ₹3,885 crore).
Segment Highlights: SUVs and Tractors
Anish Shah, CEO & Managing Director, stated that the automotive and farm sectors maintained their leadership positions thanks to steady demand and operational efficiency.
- Automotive Segment: Sales volumes jumped 23% to 3,02,238 units. M&M’s revenue market share in the SUV category grew to 24.1%.
- Farm Equipment: Tractor sales also increased by 23%, though the company’s market share dipped slightly to 44%.
Stock Market Reaction and Analyst Outlook
Following the earnings announcement, M&M shares rose 1.4%, performing better than the steady Nifty 50 index. The stock has gained 21% over the past 12 months.
Market analysts remain highly optimistic about the company’s future:
- Buy Ratings: 42 out of 43 analysts recommend buying the stock.
- Hold Ratings: Only one analyst recommends holding.
- Target Price: The average 12-month target price is ₹4,289, suggesting a potential 16% increase from current levels.
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