M&M Q2 Results: The firm posted PAT at Rs 2,090, higher than estimates | Tech US News

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Domestic auto major (M&M) on Friday beat Street estimates to report a 46% rise in net profit at Rs 2,090 crore for the second quarter ended September 30, 2022, led by sales of passenger vehicles and farm equipment. There is a huge demand.

The company had earned a net profit of Rs 1,433 crore in the same period last fiscal.

Securities had expected the company to register a net profit of Rs 2,060 crore in the quarter under review.

Total vehicle sales rose 75% to 174,098 units, while there were over 260,000 open bookings for SUVs. Sales of tractors increased by 5% to 92,590 units during the period under review.

Income from operations rose 56.5% to Rs 20,839 crore during the quarter. Earnings before interest, taxes, depreciation and amortization (Ebitda) rose 50.3 percent to Rs 2,496 crore.

Aneesh Shah, Managing Director and CEO, M&M, said, “Our strong financial results are a result of the progress we have made on our strategic imperatives. While the auto segment has grown, we have remained stable across our group companies. Have seen the performance.”

Mahindra’s farm equipment division saw the highest volume in the second quarter of this fiscal. The automobile segment also posted record volumes in the previous quarter. Exports of both vehicles and tractors remained strong during the period under review, the company said.

Rajesh Jejurikar, Executive Director, M&M, said, The company has witnessed an action-packed quarter with multiple product launches and new products across segments besides partnership announcements with BII and Volkswagen.

“We recorded our highest quarterly revenue ever for the Auto and Farm segments. In SUVs, we remain the revenue market share leader. In the Auto and Farm sector, festive sales have been strong this year. The unveiling of the XUV4OO and With our Born Electric vision, we enter the electric SUV segment and plan to establish a leadership position in the future”, Jejurikar added.

With a strong order book for its vehicles, Mahindra & Mahindra is looking to increase its production capacity by 69% to 49,000 units per month by the end of Q4FY24, from 29,000 units per month in Q2FY23. The company said the increased capacity would help reduce the waiting period for new launches and offset any increase in exports.

Sustained demand for passenger vehicles, along with a softening of semiconductor shortages and high raw material prices – which has affected production in the industry since the pandemic – is expected to benefit automakers.

“While M&M is expected to face some volume pressure in the near term due to the semiconductor issue, we are confident that new products and a strong order book with record high bookings for the new XUV700 and the new Scorpio together will increase its overall volume and profitability”, said Matul Shah, Head. Research K, adding brokerage Reliance Securities, expects the domestic PV industry to continue to show positive momentum this fiscal, with healthy volumes in the second half supporting M&M’s business.

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