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Mahindra & Mahindra Raises Fy25 Tractor Growth Forecast Amid Strong Q2 Results

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Synopsis:

Mahindra & Mahindra reported a 13% increase in Q2 net profit, raising its FY25 tractor growth forecast to 6-6.8%. SUV volumes rose 18%, and the M&M share price saw gains in 2024.

Mahindra & Mahindra news today

Mahindra & Mahindra Ltd. (M&M) has elevated its growth forecast for the tractor sector for the financial year 2025 to 6-6.8%, up from its previous 5% estimate. The revised forecast reflects the company’s strong Q2 FY25 performance, where key metrics across its automotive and farm segments exceeded market expectations, reinforcing positive sentiment around the M&M share price.

MAHINDRA & MAHINDRA LTD

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2936.25-12.69 (-0.43 %)

Updated - 21 November 2024
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Key takeaways:

  • Net profit for Q2 surged by 13% to ₹3,841 crore, surpassing expectations.

  • Revenue increased to ₹27,553 crore, outpacing estimates of ₹26,942 crore.

  • EBITDA rose by 4%, with margins expanding to 14.2%.

  • Tractor market share reached 42.5%, and SUV volumes grew 18% year-on-year.

Also Read: Tata Power Partners with Noida Airport for ₹550 Cr Renewable Energy Project.

Financial highlights of Mahindra & Mahindra Q2 FY25

M&M reported a significant uptick in both profitability and market share for the September quarter of FY25. The company’s net profit stood at ₹3,841 crore, a 13% year-on-year increase, which exceeded the CNBC-TV18 poll estimate of ₹3,405 crore. Total revenue also beat forecasts, reaching ₹27,553 crore, reflecting a positive response to the company’s product launches and market expansions. EBITDA for the quarter saw a 4% increase, rising to ₹3,903 crore, with margins expanding by 30 basis points to 14.2%, well above the expected 13.9%.

Also Read: MOIL Achieves Record October Production with 1.47 Lakh Tonnes, Up 32% YoY

Auto and farm business performance

In its automotive segment, M&M achieved its highest-ever quarterly volumes of 231,000 units, marking a 9% increase. The SUV segment led this growth with volumes reaching 136,000 units, an 18% rise compared to the same quarter last year. With an SUV capacity of 54,000 units, M&M continued its leadership in revenue market share, gaining 190 basis points.

The farm equipment sector also recorded solid growth, with quarterly volumes at 92,000 units, a 4% year-on-year increase. Despite international market challenges, M&M’s domestic tractor market share expanded to 42.5%, up by 90 basis points.

Metrics

Values

Net Profit

₹3,841 crore

Revenue

₹27,553 crore

EBITDA

₹3,903 crore

EBITDA Margin

14.2%

Auto Segment Quarterly Volumes

231,000 units

SUV Volumes

136,000 units

Farm Equipment Volumes

92,000 units

Tractor Market Share

42.5%

Also read: Fed Cuts Rate by 25 Bps to 4.5-4.75% to Support Cooling Economy.

M&M share price and market outlook

The performance across both the auto and farm divisions, alongside the upward revision of tractor growth for FY25, signals optimism for M&M's future. The company’s strategic focus on product innovation and market share expansion is expected to sustain investor interest in the M&M share price. Despite a slight dip in shares post-earnings, M&M has gained over 70% in 2024, underscoring a strong market presence.

Mahindra & Mahindra’s raised outlook for tractor growth and strong quarterly results bolster confidence in its growth trajectory. The positive momentum across auto and farm segments further supports a favourable outlook for the M&M share price going forward.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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