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Informist, Wednesday, Jul. 30, 2025

 

By Narayana Krishna

 

HYDERABAD - Double-digit volume growth in passenger vehicles and tractors, along with rising exports, will continue to drive Mahindra & Mahindra Ltd.'s sales and net profit for the June quarter, according to analysts. The company's sports utility vehicles—particularly flagship models such as the Thar and XUV series—along with electric vehicles, are expected to contribute significantly to its overall performance.

 

M&M is expected to report a 19% on-year rise in net profit to INR 31.15 billion while revenue is likely to grow 25% to INR 337.99 billion, based on the average of estimates from nine brokerages. On a trailing basis, the company's net profit is seen rising 28% and revenue is seen up 7%, the estimates show.

 

The highest net profit estimate of INR 34.24 billion is from Nirmal Bang Equities Pvt. Ltd., and the lowest estimate is INR 28.54 billion from HDFC Securities Ltd. Revenue estimates range from INR 329.84 billion by InCred Research Services Pvt. Ltd. to INR 350.74 billion by JM Financial Institutional Securities Pvt. Ltd.

 

In the June quarter, M&M's utility vehicle sales in India rose 22% on year to 152,067 units and tractor sales increased 10% to 134,089 units. Exports grew 36% to 9,667 units during the quarter. The company also saw a rise in tractor sales in June, supported by a favourable monsoon. M&M will announce its June quarter earnings on Wednesday.

 

Kotak Institutional Equities expects M&M's June quarter revenue to grow 23% on year, led by a 27% rise in revenue from the automotive segment on a 17% increase in volumes. This growth is driven by SUVs and exports. The tractor segment revenue is expected to grow 13% on year, mainly due to a 10% increase in volumes, Kotak said.

 

Kotak also expects a 2% increase in the tractor segment's average selling price due to a richer product mix, and an 8.5% rise in automotive ASPs, or average selling prices, driven by a higher mix of electric vehicles and a lower share of light commercial vehicles.

 

Although M&M's June quarter sales volumes are healthy, analysts have mixed views on the company's margins due to potential pressure from higher raw material costs on the company's overall earnings before interest, tax, depreciation, and amortisation margin. "We estimate 27% year-on-year revenue growth, led by 17% growth in auto volumes, while tractor volumes were up 10% on year. We expect EBITDA margin to decline 90 basis points quarter-on-quarter to 14% due to higher raw material costs," Nomura Equity Research said in a note.

 

YES Securities India Ltd. expects a 50-bps contraction in margin on both year-on-year and on a trailing basis due to a higher share of electric vehicles in the overall passenger vehicle sales. Motilal Oswal Financial Services Ltd. expects auto segment's margins to decline 70 bps to 8.8% in Apr-Jun while tractor margins are likely to remain healthy, with a 30-bps improvement at 18.8%.

 

Kotak expects M&M's June quarter EBITDA to rise 24% on year, supported by volume growth and a richer product mix in the tractor segment. The average of estimates from eight brokerages pegs the June quarter EBITDA at INR 49.01 billion. The brokerages expect EBITDA margin to improve 10 bps on year.

 

Supply chain issues related to rare earth minerals will be a key factor to watch out for as several automobile companies have warned of production cuts unless China lifts its restrictions on rare-earth exports.

 

At 1439 IST, shares of M&M traded at INR 3,211.90 on the National Stock Exchange, up 0.4% from its previous close. M&M's stock price has risen nearly 7% since the announcement of its March quarter earnings.

 

Of the 19 research reports on the company available with Informist, 18 brokerages have a 'buy' or equivalent rating, with an average target price of INR 3,484. One has a 'hold' rating with a target price of INR 3,254.

 

Following are the Apr-Jun earnings estimates for Mahindra & Mahindra Ltd. based on reports from nine brokerage firms in the descending order by the estimate of net profit:

Brokerage name	Net Sales	Net Profit	EBITDA
	--in INR million --
Nirmal Bang Equities Pvt Ltd	3,40,689.00	34,242.00	51,103.00
JM Financial Institutional Securities Pvt Ltd	3,50,739.00	33,258.00	52,962.00
Nomura Equity Research	3,42,289.00	32,724.00	47,925.00
Nuvama Wealth Management Ltd	3,42,828.00	30,792.00	47,648.00
Motilal Oswal Financial Services Ltd	3,30,571.00	30,737.00	47,336.00
Kotak Institutional Equities	3,31,771.00	30,570.00	49,760.00
InCred Research Services Pvt Ltd	3,29,840.00	29,887.00	46,514.00
YES Securities (India) Ltd	3,40,058.00	29,581.00	48,844.00
HDFC Securities Ltd	3,33,103.00	28,541.00	--
Average	3,37,987.56	31,148.00	49,011.50

 

End

 

US$1 = INR 87.46
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Tanima Banerjee

 

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