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Informist, Monday, Nov. 3, 2025

 

By Anand JC

 

NEW DELHI – Mahindra & Mahindra Ltd.'s September quarter net profit growth is expected to slide to a five-quarter low as the company's margin likely came under pressure due to a higher mix of electric vehicle sales, despite recording a sizeable growth in its automotive and farm equipment despatches, according to analysts. Nevertheless, solid sales growth is set to drive the company's top-line growth to double digits for the 15th consecutive quarter, the analysts said.

 

M&M's net profit is expected to grow just under 5% on year to INR 40.20 billion for the reporting quarter, according to an average of 12 estimates. Projections range from a low of INR 31.36 billion by Nirmal Bang Equities to a high of INR 47.45 billion by Nuvama Wealth Management.

 

Revenue from operations of the Thar-maker is likely to be INR 339.69 billion, up over 17% on year, according to an average of forecasts. The lowest estimate for the company's September quarter revenue is INR 329.21 billion by Motilal Oswal Financial Services and the highest estimate is INR 347.81 billion by HDFC Securities.

 

Analysts have lauded the strong despatches registered by the company during the reporting quarter, especially by its farm equipment segment. M&M sold 261,703 cars and commercial vehicles during the September quarter, up 13% on year and 6% on quarter, according to Nuvama. The Mumbai-based automotive giant is India's top company by revenue market share in the sport utility vehicle segment, light commercial vehicles with payload capacity under 3.5 tonnes, and electric three-wheelers.

 

M&M, which holds a 43% market share in India's farm equipment segment, benefited from a good monsoon in the September quarter and sold 122,936 tractors, up 32% on year. Tractors formed around 32% of its overall sales in the reporting quarter while utility vehicles formed just over 58%, according to YES Securities.

 

After the August announcement of a potential cut in the goods and services tax, M&M had held back despatches of its cars to dealership to keep their inventories lean. Just as the footfalls increased in the final week of September due to the new GST regime and Navratri, the company ran into logistical troubles. "The surge in festive demand has placed significant constraints on availability of trailers. We are working to improve dispatches to our dealer network within the constraints," Nalinikanth Gollagunta, chief executive officer of its automotive division.

 

"Robust revenue growth shall be supported by an increase in Auto/Farm volumes and better auto realisations," Nuvama said. The average selling price of M&M's automotive segment vehicles is set to increase due to sales of its BE 6 and XEV 9e electric cars and lower sales of light commercial vehicles during the quarter, analysts said.

 

M&M's average realisation per vehicle sold was INR 914,003 in the year-ago quarter, which had risen to INR 944,712 in the June quarter. With the company passing on GST benefits early to customers, Motilal Oswal Financial Services expects M&M's average realisation per vehicles to be INR 941,122 for the September quarter.

 

M&M's earnings before interest, tax, depreciation, and amortisation for the September quarter are expected to fall nearly 12% on year to INR 46.55 billion, according to an average of nine estimates. Projections for the EBITDA range from a low of INR 38.95 billion by Nuvama to a high of INR 51.13 billion by Emkay Global Financial Services. M&M had reported an EBITDA of INR 52.70 billion in the September quarter last year and of INR 47.95 billion in the June quarter.

 

Analysts expect M&M's EBITDA margin to grow due to better operating leverage and sales of higher-margin tractor variants but the rise could be limited by commodity price pressures and higher sales of loss-making electric vehicles. M&M had reported an EBITDA margin of 14.3% for the year-ago quarter. While Kotak Securities has pegged a 10-basis point increase in the EBITDA margin, Yes Securities and Prabhudas Lilladher have forecast a 50 bps and 20 bps fall, respectively.

 

M&M will release its September quarter earnings on Tuesday. Its shares have risen just over 13% since the company reported its June quarter earnings. On Friday, its shares closed at INR 3,487.20 on the National Stock Exchange, down 0.4%.

 

Of the 21 brokerage reports on the company available with Informist, 20 have a 'buy' or equivalent rating on the stock, with an average target price of INR 3,529. One brokerage has recommended holding M&M's stock, with a target price of INR 3,254.

 

Following are the Jul-Sept earnings estimates of Mahindra & Mahindra Ltd. from 12 brokerages in descending order of the estimate of net profit in INR million:

 

Broker	Net sales	Net profit	EBITDA
Nuvama Wealth Management Ltd	343,439	47,453	38,954
Emkay Global Financial Services Ltd	346,011	44,001	51,126
Anand Rathi Share and Stock Brokers Ltd	334,783	43,505	--
Motilal Oswal Financial Services Ltd	329,211	42,940	46,154
HDFC Securities Ltd	347,812	40,160	--
Kotak Securities Ltd	339,195	39,963	48,907
Nomura Equity Research	334,286	39,854	47,155
ICICI Securities Ltd	342,565	39,840	--
Prabhudas Lilladher Pvt Ltd	329,842	39,688	46,508
YES Securities (India) Ltd	340,832	39,517	47,018
JM Financial Institutional Securities Pvt Ltd	346,695	34,063	48,501
Nirmal Bang Equities Pvt Ltd	341,660	31,357	44,587
Average	339,694	40,195	46,546

 

End

 

Edited by Akul Nishant Akhoury

 

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