Will EVs accelerate M&M’s speed?
Subscribe to enjoy similar stories. Mahindra & Mahindra Ltd’s (M&M) shares have gained as much as 86% in the past one year on strong outlook and are now hovering near their 52-week highs of ₹3,270.55 seen on Tuesday. While the December quarter (Q3FY25) results announced on Friday are strong, they are on expected lines.
Standalone Ebitda grew 38% year-on-year to ₹4,500 crore, comparing favourably with the 24% growth seen in the half-year ended September (H1FY25). Profitability was driven by margin improvements across auto and farm equipment segments. Better realization and higher volumes meant Ebitda per unit grew 17% to ₹1,32,000.
M&M’s revenue was up 21% last quarter to ₹30,500 crore. Auto segment revenue grew 21%, higher than volume growth of 16%, helping the company improve its Ebit margin by 120 basis points (bps) to 9.7%. Within auto, the key sports utility vehicles (SUVs) portfolio saw 20% volume growth with market share improvement.
The company is facing capacity constraints for the petrol version of its recently launched models, 3XO and Thar Roxx, across both domestic and exports market even though the diesel variant has received less traction. The capacity is expected to rise 15-20% from current 9,000 units per month for each model, with the completion of ongoing de-bottlenecking exercise by June. However, the light commercial vehicles segment remained muted with volume growth at 7%.
In the farm equipment segment, Q3FY25 volume growth of 20% (H1FY25 growth: 5%) was aided by good rainfall and strong sowing. Farm equipment Q3 Ebit rose 260 bps to 18.1%. The segment is more profitable for M&M given lower competitive intensity and accounted for 27% and 41% of the company’s 9MFY25 revenue and Ebit, respectively.
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