Mahindra & Mahindra Ltd (M&M) has reported a strong performance for the second quarter of FY25, with its standalone net profit rising by 13.2% year-on-year (YoY) to ₹3,840.88 crore, up from ₹3,393.06 crore in the same quarter last fiscal year. The increase in profits signals positive growth for the auto major despite ongoing market challenges.
Revenue growth and operational performance
The company's standalone revenue for Q2FY25 rose by 12.94%, reaching ₹27,553.26 crore, compared to ₹24,394.79 crore during the same period last year. This revenue growth was driven by robust sales across M&M’s automotive and farm equipment divisions. The company’s performance on a consolidated basis also reflected significant growth, with a 35% YoY increase in net profit, amounting to ₹3,171 crore. Additionally, consolidated revenue rose by 10% YoY to ₹37,689 crore.
Automobile and tractor sales lead the charge
M&M’s automobile segment recorded its highest-ever quarterly volumes, with 2,31,038 units sold in Q2FY25, marking a 9% increase YoY. The growth was bolstered by the company’s successful launches in the SUV market, which saw a notable 18% increase in volumes. This helped M&M maintain its leadership position in revenue market share, achieving a 190 basis point (bps) increase YoY.
Tractor sales also saw a steady rise, with a 4% increase YoY to 92,382 units. M&M’s Farm Equipment Segment achieved its highest-ever Q2 market share, which stood at an impressive 42.5%. This strong performance in both sectors highlights the company's continued leadership and ability to gain market share in its key areas of operation.
Operational gains and margin improvement
At the operational level, M&M recorded a significant rise in earnings before interest, taxes, depreciation, and amortisation (EBITDA). In Q2FY25, EBITDA surged by 30% YoY, reaching ₹3,908 crore, compared to ₹2,993 crore in the previous year. This strong operational performance was further reflected in the EBITDA margin, which improved by 190 bps YoY to 14.2% from 12.3%.
Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector), M&M, highlighted that the company’s market share gains were a result of the successful launches of new SUV models, as well as its leadership in the light commercial vehicle (LCV) market, where M&M's volume market share for LCVs under 3.5 tons rose by 260 bps YoY to 52.3%. The auto segment’s standalone profit before interest and tax (PBIT) margin also improved, reaching 9.5%, a gain of 140 bps YoY.
Market reaction and investor sentiment
Despite the strong performance, M&M’s share price showed a slight dip, trading 0.56% lower at ₹2,918.25 per share on the Bombay Stock Exchange (BSE) at 12:25 pm. However, investors may still consider M&M as a solid option for long-term growth, given its market-leading position and continued success in both its automotive and farm equipment segments.
For those looking to invest in stocks, M&M's Q2 results reflect its robust operational health, making it a potential contender for portfolio diversification. The company’s consistent growth across key sectors demonstrates its resilience and potential for future profitability.
Conclusion
In summary, Mahindra & Mahindra's strong performance in Q2FY25, marked by a 13% increase in net profit, signals that the company is well-positioned for sustained growth in the coming quarters. With strong sales in both the automobile and tractor sectors, along with improved operational margins, M&M continues to be a leader in its field. Investors looking to invest in stocks should take note of M&M’s market share gains and solid financial standing, which point to a positive outlook for the company in the future.
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