Lower festival demand fails to slow XUV, Thar maker
Subscribe to enjoy similar stories. Mahindra & Mahindra’s (M&M) bet on premium sport utility vehicles (SUVs) and the high demand for its SUVs helped it better negotiate the margin squeeze that its peers faced during the October-December quarter. The Thar and XUV 700 SUV maker gave fewer discounts than its peers during the festival period around November, which usually sees the highest automotive sales in India, its top management told media Friday.
The company also hiked prices for two of its popular models—XUV 3X0 and XUV 700—at the beginning of the quarter, further securing its margins. “We did not have to discount too much through the festival season and post that, as well, because a large part of our portfolio is on a very strong demand pipeline," said Rajesh Jejurikar, executive director & CEO (Auto and Farm Sector), M&M Ltd. Also Read: M&M Q3 result: Profit jumps 20% YoY to ₹3,181 crore; revenue rises 18% M&M reported a 15.4% Ebitda margin during the quarter on a standalone basis, which includes its core automotive and farm equipment business.
The company reported an Ebitda margin of 14.2% in the corresponding quarter last year and 18.2% during the preceding quarter. Ebitda is a popular performance metric that stands for earnings before interest, tax, depreciation and amortization. Carmakers’ margins suffered during the third fiscal quarter ending 31 December due to slowing demand and a pile-up of cars at showrooms, forcing them to offer discounts.
Tata Motors reported an Ebitda margin of 13.7% for its consolidated business during the period under review, which was 60 basis points lower year-on-year. One basis point is 0.01%. Market leaders Maruti Suzuki and Hyundai Motor India reported Q3 Ebitda margins of 11.6%
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