- Mahindra & Mahindra shares rose up to 6.5% after strong Q2 earnings on November 5
- Net profit increased 12.9% YoY to Rs 5,102 crore, beating analysts' estimates
- Revenue rose 27.1% YoY to Rs 42,477 crore, exceeding market expectations
Mahindra & Mahindra (M&M) shares were in demand on Thursday, November 5, with the stock rallying as much as 6.5% to hit an intraday high of Rs 3,143.95 per share.
Around 1:30 pm, M&M shares were trading 5.57% higher at Rs 3,116.40. In comparison, the BSE Sensex was trading 2.35% higher at 79,121.
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The rally came after the automaker reported a healthy set of numbers for the September quarter, with its net profit and revenue beating analysts' estimates.
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M&M reported a 12.9% year-on-year (YoY) increase in net profit at Rs 5,102 crore, compared with Rs 4,521 crore in the year-ago period. The figure was also higher than analysts' estimate of Rs 4,545 crore.
Revenue from operations rose 27.1% to Rs 42,477 crore from Rs 33,422 crore a year ago, beating the estimate of Rs 41,332 crore.
However, operating performance was a mixed bag. EBITDA increased 2.1% YoY to Rs 4,912 crore, slightly below the estimate of Rs 5,015 crore. EBITDA margin contracted to 11.6% from 14.4% in the corresponding quarter last year, also missing the estimate of 12%.
M&M Q2: How Did Auto And Farm Businesses Perform?
M&M's automotive business reported a 36% YoY increase in revenue to Rs 33,937 crore, while EBIT rose 15% to Rs 2,614 crore.
READ | M&M Q2 Results: Profit Rises 13%, Tops Estimates; Margin Contracts Amid Higher Commodity Costs
The company's SUV volumes grew 26% YoY, while its electric vehicle portfolio maintained the top position in revenue market share during the first half of FY27.
Meanwhile, the farm equipment business reported a 1% rise in revenue to Rs 8,594 crore. However, EBIT declined 14% YoY to Rs 1,441 crore.
The farm business recorded volumes of 1.16 lakh units during the quarter, with a market share of 41.5%. Its standalone PBIT margin stood at 16.8%, down 300 basis points from a year ago.
On a consolidated basis, the farm segment's revenue declined 6% to Rs 9,572 crore, while profit after tax fell 9% to Rs 1,053 crore.
How Did M&M's Services Business Perform?
M&M's services business reported an 18% YoY increase in consolidated revenue to Rs 11,821 crore, while profit after tax rose 18% to Rs 1,147 crore.
Mahindra Finance reported a 15% increase in assets under management (AUM), while profit after tax jumped 61%. Tech Mahindra's profit rose 33%, with its EBIT margin standing at 14.8%.
Mahindra Lifespaces reported residential pre-sales of Rs 1,100 crore, up 41% YoY, while Mahindra Logistics' revenue increased 24% to Rs 2,095 crore.
Mahindra Holidays reported an occupancy rate of 76%, an improvement of 220 basis points, with its room inventory reaching 5,762 keys.
What M&M Management Said
Commenting on the Q2 results, M&M Group CEO and Managing Director Anish Shah said the group's consolidated profit growth of 25% reflected the strength of its diversified businesses.
"Our Q2 F27 Consolidated PAT growth of 25% reflects the resilience of our group and underlines the disciplined execution across businesses," Shah said.
He added that the automotive business continued to benefit from strong consumer demand, while the farm segment witnessed a marginal decline due to the shift in the festive season.
Rajesh Jejurikar, Executive Director and CEO of M&M's Auto and Farm Sector, said the automotive business delivered strong growth, supported by a 26% increase in SUV volumes.
He added that the automotive segment's consolidated PBIT margin improved 110 basis points sequentially to 8.8%, while the farm segment's margin increased 20 basis points quarter-on-quarter despite higher commodity prices.
Group CFO Amarjyoti Barua said the company's balance sheet and cash generation provided flexibility to invest in future growth opportunities despite commodity and geopolitical headwinds.
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