Mahindra & Mahindra Q2 Preview: Revenue growth expected; profits likely to stay flat

Mahindra & Mahindra (M&M) is poised for solid revenue growth in the second quarter of FY25, led by its tractor and automotive segments. Analysts forecast a year-on-year (YoY) revenue increase of around 10-13 per cent, though net profit may remain flat or witness a modest shift due to mixed operating factors. Here’s what major brokerages predict for the automaker's upcoming quarterly results.

Revenue and Profit Outlook

As per Zee Business estimates, M&M's revenue for Q2 is expected at Rs 27,262 crore, reflecting a 12.1 per cent YoY rise. EBITDA has projected at Rs 3,950 crore, an impressive 34.7 per cent jump YoY, with margins improving to 14.5 per cent from the previous 12.1 per cent. Net profit, however, might dip marginally to Rs 3,450 crore. Notably, Zee's estimate doesn’t include income from subsidiaries in its revenue figures, allowing a sharper focus on core operations.

Analysts expect M&M's revenue to rise YoY, largely driven by robust performance in both its automotive and tractor divisions. According to Nuvama Institutional Equities, revenues may grow 10 per cent YoY, potentially reaching Rs 26,815 crore, with a notable EBITDA rise of 21 per cent to Rs 3,704 crore. However, net profit is anticipated to see limited growth, increasing by around four per cent to Rs 3,383 crore, as higher costs might offset top-line gains.

Segmental Performance
Kotak Institutional Equities projects a 13 per cent YoY revenue surge, with the tractor and automotive segments posting eight and 15 per cent gains, respectively. However, Kotak expects a slight dip in margins owing to a weaker segmental mix and the impact of fixed costs, which may reduce EBITDA margins by around 30 basis points (bps) quarter-on-quarter (QoQ). 

Motilal Oswal sees a 13 per cent increase in automotive volumes and a six per cent uptick in tractor sales. Yet, they anticipate margin compression due to product mix shifts, potentially lowering the farm equipment segment's margin by 100 bps to 17.5 per cent.

YES Securities estimates an overall volume growth of 7.4 per cent YoY, despite a quarter-on-quarter dip in tractor volumes. They predict a 13 per cent revenue rise to Rs 27,530 crore, along with a 14.1 per cent EBITDA margin, marking a 150 bps YoY improvement. However, flat adjusted profit after tax (PAT) at Rs 3,490 crore suggests limited profitability growth.

Overall, M&M’s Q2 results will reflect strong revenue from core segments, yet profits may be subdued due to mixed margins and high fixed costs. Investors will be watching for updates on M&M’s production ramp-up and demand outlook in both automotive and agriculture, especially with new model launches in the SUV segment.