Strong demand for XUV 700, Scorpio-N boosts M&M profit in Q2, brokers raise target price | Tech US News


Mahindra & Mahindra last week reported a 44% rise in net profit at Rs 2,773 crore for the September quarter, boosted by strong sales of its newly launched sports utility vehicles XUV 700, Scorpio N and Thar. Mahindra & Mahindra (M&M) said in a regulatory filing that the group had made a net profit of Rs 1,929 crore in July-September last fiscal.

It added that income from operations rose to Rs 29,870 crore during the quarter under review from Rs 21,470 crore in the year-ago period. On a standalone basis, the company reported revenue of Rs 20,839 crore in the second quarter, up 57 percent from Rs 13,314 crore in the same period a year ago.

Profit after tax rose 46 percent to Rs 2,090 crore in the September quarter, as compared to the year-ago period.

The auto major said it sold a total of 1,74,098 vehicles in the second quarter, up 75 percent from 99,334 units in the September 2021-22 quarter. Tractor sales rose 5 percent to 92,590 units in the September quarter of 2022-23 from 88,027 units in the year-ago period.

M&M Managing Director and CEO Anish Shah said the group’s strong financial results reflect the progress it has made in its strategic imperatives. “While the auto segment has led the growth, we have seen solid performance across our group companies. Our journey to create value and provide growth capital continues,” he added.

Elaborating further, Rajesh Jejurikar, Executive Director, M&M, said, “It has been an action-packed quarter with several product launches and new products across segments besides partnership announcements with BII and Volkswagen.”

The previous quarter also marked the company’s highest recorded quarterly revenue for the auto and farm segments, he added.

“In SUVs, we remain the revenue market share leader. In the auto and farm sectors, festive sales have been strong this year. With the unveiling of the XUV4OO and our Born Electric Vision, we entered the electric SUV segment and established leadership. aim for. position in the future,” Jejurikar said.

Brokers live fast.

The second-quarter earnings were in line with estimates compiled by Mumbai-based brokerage firm MK.

“Second quarter revenue grew 57 percent year-on-year (YoY) to Rs 20,840 crore, in line with our estimates. Matching our estimates, Rs 2,500 crore,” MK said in a note.

“Management expects margins to improve further on commodity prices and price increases. The passenger vehicle (PV) order book is strong at 260,000 units, driven by strong demand for the Scorpio-N, XUV 700, and Thar models. EVs remain the focus, with delivery of the electric XUV400 expected in Q4FY23. Management expects to launch 6 electric models for PVs by CY27,” added the brokerage firm.

MK has maintained a buy call on the stock with a target price of Rs 1,530 per share.

“SUV retail sales continued to gain momentum, with the highest monthly bookings at 53,000 units in September 2022. Its average monthly bookings in the second quarter were strong across all models (48,000 units vs. 35,000 units in September 2022). ),” said Motilal Oswal.

It added, “Mahindra & Mahindra’s second quarter earnings were with stable margins despite a weak mix. While the auto business is on a strong growth path, led by a refreshed product portfolio, its tractor outlook remains muted for the second half of the current fiscal. A strong order backlog in SUVs will continue to boost its performance, supported by capacity expansion and raw material cost savings.

Motilal Oswal also has a buy call on the stock for a target price of Rs 1,470.

(with PTI input)


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