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Informist, Monday, May 4, 2026

 

By Anand JC

 

MUMBAI – Mahindra & Mahindra Ltd. is projected to report robust year-on-year growth in key financial metrics for the March quarter because of higher sales of its sport utility vehicles, an increased focus on premiumisation, and improved realisations, according to analysts. The company's top line is expected to continue growing in double digits for the 17th consecutive quarter and its net profit is expected to rise at the fastest rate in nine quarters.

 

M&M's bottom line is projected to rise a shade over 43% on year to INR 34.93 billion for the reporting quarter, according to an average of estimates from 14 broking firms. Estimates for M&M's bottom line range from a high of INR 36.82 billion from Anand Rathi Share and Stock Brokers Ltd. to a low of INR 32.36 billion from Motilal Oswal Financial Services Ltd.

 

The Mumbai-based automaker's top line is expected to be INR 383.40 billion for the March quarter, according to the average of estimates. The highest estimate for M&M's revenue is INR 402.30 billion from Nirmal Bang Equities Pvt. Ltd. "Standalone revenue is expected to increase 27% YoY, supported by robust growth in tractor and SUV volumes along with improved auto realisations," the firm said. The lowest projection for the top line is of INR 371.18 billion from JM Financial Institutional Securities Pvt. Ltd.

 

In all, M&M sold 421,266 units in the March quarter, up 24% on year but down 6% on quarter. Despatches of its sport utility vehicles improved 23% on year to 183,800 units while those of tractors grew 36% on year to 119,811 units. ICICI Securities expects M&M's revenue from the automotive segment to improve 17% on year and sales of its tractor business to grow 38%.

 

M&M's automobile line-up consists purely of sport utility vehicles, a segment where the company leads the market nationally. "Strong SUV portfolio and increasing customer preference toward the sub-segment, with new launches, including EVs, are consistently driving strong volumes, premiumisation and improved realisation," Prabhudas Lilladher Pvt. Ltd. said. Higher realisations are expected to be driven by sales of its electric vehicles, which are priced higher than most of its fossil-fuel-run cars and have found favour with customers. M&M's market share in the electric car space, dominated by Tata Motors Passenger Vehicles Ltd., has increased to around 25% now from around 8% in the financial year 2024-25 (Apr-Mar).

 

M&M also has a strong presence in the three-wheeler, commercial vehicle, and farm equipment segments. The company had a 52% market share in light commercial vehicles with a payload capacity under 3.5 tonnes and 43% in the farm equipment business, according to its annual report for FY25.

 

M&M had lost some market share in the December quarter because its Swaraj division ran out of stock but it managed to recover some ground in January. "It (tractor capacity) is tight, honestly, because we are not prepared for 25% growth this year. So, we are scrambling to put capacity...," the company had told analysts in a call after disclosing its December quarter financial results. The company approved adding more capacity through its subsidiary Swaraj Engines Ltd., which it had expected to be completed by March. In its automotive segment, M&M had faced production constraints for certain models such as the 3XO, Bolero, and Scorpio-N at various plants.

 

MARGIN WORRIES

M&M is expected to report earnings before interest, tax, depreciation, and amortisation of INR 54.44 billion for the March quarter, according to an average of 10 estimates. The highest estimate for the EBITDA is INR 57.68 billion from Prabhudas Lilladher while the lowest is INR 51.78 billion from Emkay Global Financial Services Ltd.

 

Most automobile companies in India are expected to report strong growth in revenue and profit. However, analysts have flagged margin worries for most original equipment manufacturers primarily because of rising raw material costs. In the December quarter, the company had flagged inflation in "almost every commodity". Prices of precious metals, copper, aluminium, and other key metals have gone up sharply. Prices of certain commodities have also got an additional boost from the war in West Asia.

 

M&M had hiked prices across models by 1% in January. To further offset input cost pressures, the company raised prices by another 2.5% from April for its sport utility vehicles and commercial vehicles fuelled by petrol and diesel.

 

M&M had reported an EBITDA margin of 14.9% in the year-ago quarter and 14.7% in the December quarter. "We estimate overall EBITDA margin to decline by 40 bps (basis points) YoY (year on year) led by commodity headwinds, higher mix of EVs (electric vehicles), partly offset by operating leverage benefit and cost control measures," Kotak Securities Ltd. said. Nomura Equity Research and YES Securities (India) Ltd. have forecast a sharper drop in the automaker's EBITDA margin to 14% and 14.2%, respectively, because of higher commodity costs.

 

A higher portion of M&M's portfolio now comprises electric vehicles, when compared to a year ago. Manufacturing of these cars is quite dependent on imports. In January, the company had said imports were going to be affected because of the depreciation of the rupee. In February, it had flagged the pressure on the rupee in a call with analysts after releasing its December quarter earnings but had also hoped that the sharp slide in the currency would not continue because India and the US had announced plans for a trade deal that would result in a reduction in tariffs. Since then, the rupee has depreciated roughly 4%, mainly because of the war in West Asia.

 

All 14 research reports on the company available with Informist have a "buy" recommendation on the stock with an average target price of INR 4,163. Monday, shares of Mahindra & Mahindra closed slightly higher at INR 3,106.50 on the National Stock Exchange. The shares are down over 15% since the company announced its December quarter earnings on Feb. 11.

 

The following are the Jan-Mar earnings estimates, in INR billion, for Mahindra & Mahindra Ltd. from 14 brokerages in descending order of the net profit estimate:

Brokerages	Net sales	Net profit	EBITDA
Anand Rathi Share and Stock Brokers Ltd.	390.79	36.82	--
Elara Securities (India) Pvt. Ltd.	378.00	36.50	53.70
Nirmal Bang Equities Pvt. Ltd.	402.30	36.40	56.13
Kotak Securities Ltd.	380.94	36.09	55.36
Prabhudas Lilladher Pvt. Ltd.	400.56	35.58	57.68
B&K Securities	372.85	35.43	--
ICICI Securities Ltd.	380.62	35.40	--
HDFC Securities Ltd.	378.17	35.06	--
Nomura Equity Research	377.72	35.06	52.93
YES Securities (India) Ltd.	372.87	34.92	52.85
JM Financial Institutional Securities Pvt. Ltd.	371.18	33.51	52.18
Nuvama Wealth Management Ltd.	381.47	33.18	54.38
Emkay Global Financial Services Ltd.	391.07	32.79	51.78
Motilal Oswal Financial Services Ltd.	389.12	32.36	57.41
Average	383.40	34.93	54.44

 

End

 

Edited by Rajeev Pai

 

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