M&M Q1 Preview: Auto segment in the driving seat, net profit seen rising 27%

The net profit of major auto companies Mahindra and Mahindra (M&M) for the April-June quarter of fiscal 2024 is expected to grow 27% year-on-year (YoY) on the back of increased vehicle sales. strong in the quarter mentioned above.
M&M, which will report quarterly results on August 4, is expected to post a net profit of Rs 1,865 billion in the first quarter, compared with a profit of Rs 1,471 billion a year ago. The company’s operating revenue is expected to grow 20% in the June quarter to Rs 23,473 crore, according to median estimates from six brokerages. M&M’s revenue for the same period of fiscal year 23 was Rs 19,613 crore. The auto outlook from brokerage BNP Paribas suggests the company’s revenue will be largely supported by M&M’s automotive arm. Analysts at the brokerage estimate that auto segment revenue is expected to grow 20% in the quarter under review. This is due to an increase in quantity and average selling price as a result of the company increasing prices and a richer product mix.
Nomura said Farm Equipment Segment (FES) revenue is expected to grow 3% year-on-year with ASP’s 6% year-on-year increase, partially offset by low volumes. than.
The company’s earnings before interest, taxes, depreciation and amortization, or EBITDA margin, are also expected to improve by about 120 basis points due to lower raw material costs. Regarding the electric vehicle sector, M&M informed the stock exchanges on August 3 that Temasek Holdings Pvt Limited, Singapore’s sovereign wealth fund, will invest up to Rs 1,200 crore in the EV business. at a valuation of up to Rs 80,580 crore. Following the investment, Temasek will own a 1.49-2.97% stake in MEAL (Mahindra Electric Automobile Limited), M&M’s electric vehicle business, on a fully diluted basis, according to regulatory filings.
Temasek Holdings is a global investment company with a net portfolio value of $287 billion as of March 31.