M&M Q1 preview: Margins expected to remain steady; demand outlook for tractors a key factor to watch out for

M&M- the country's leading passenger vehicle and utility vehicle major is slated to reveal its Q1 numbers later today. The company's standalone net profit is estimated to fall 2 per cent on-year to Rs 2,720 crore in June quarter as against Rs 2,774 crore in the same quarter last year. The dip in the profit is likely to be on account of an increase in taxation rate from 17.1 per cent to 20.5 per cent. Also, one-time gain of Rs 405 crore during the same quarter last year is likely to weigh on the company's earnings in the reporting quarter.

Revenue, meanwhile, is expected to log decent high double-digit growth to the tune of Rs 28,550 crore as against Rs 24,056 crore, up 18.7 per cent over the corresponding period last year.

EBITDA at the company is also seen edging higher by 20 per cent on-year to Rs 3,880 crore versus Rs 3,255 crore. The company's margins are seen to remain steady with 20 bps growth to 13.6 per cent during the reporting quarter as against 13.4 per cent in the same quarter last year. This is likely anticipated on the back of weak product mix and operating performance.

The realizations at the auto major during the reporting quarter are expected to climb 5.5 per cent to Rs 8.42 lakh per unit. The desk clarified that in the base period i.e. Q1FY24, the company did not considered Rs 312 income from subsidiaries as part of the revenue.

Furthermore, the marketing expense during the period is seen to jump on the back of expenditure related to new model launches.

Key watch out

Investors and other stakeholders will watch out for the demand outlook for tractors

M&M share price performance

The stock in the last one year has scaled 99 per cent and last ahead of its results tomorrow traded on a muted note at Rs 2,921.9 per s