Mahindra & Mahindra Q4 Review: Brokerages Bullish Post Earnings Beat On Margin Strength, SUV Momentum

Mahindra & Mahindra Ltd. posted a solid performance across revenue, margins, and operating metrics in its final quarter performance for the quarter ended March. Brokerages including Goldman Sachs, BofA, Macquarie, and Citi have indicated a positive outlook on the counter, with calls ranging from 'buy' to 'outperform'.

Here's a breakdown of what the brokerages liked (and didn't like) in M&M's latest results:

What Brokerages Liked

All four brokerages highlighted M&M's margin strength, especially in the farm segment. Auto margins held steady, with the ICE SUV business delivering a 10% Ebitda margin.

M&M's SUV volume guidance of mid-to-high teens growth in the current fiscal, far outpacing industry expectations of 1-2%, was termed the "biggest positive surprise" by BofA. The SUV momentum is being driven by new launches like the Thar Roxx and XUV 3XO, capacity expansion, and the ramp-up of EV models. M&M plans to expand SUV capacity by 12% in the current financial year and 23% in the next.

The EV business reported Ebitda breakeven in its first delivery quarter, which BofA claimed is "not as bad as expected". Goldman Sachs noted the MEAL business is already Ebitda positive without PLI incentives and expects Ebit breakeven within 12–18 months. Macquarie believes the PLI scheme, combined with cell price reductions and localisation, could lift EV margins by 4–5%.

BofA and Macquarie particularly highlighted tractor segment margins, which reached 19.4% in the quarter ended March. This was attributed to a favourable mix, lower input costs, and positive geographic trends (especially in South and West India), as pointed out by Citi.

What Brokerages Flagged

Citi pointed out that despite strong Ebitda, profit after tax was only marginally above expectations due to lower other income (partly from a write-off in the farm equipment subsidiary) and higher depreciation.

While management guided for high growth in SUVs, Citi maintained a more cautious view, expecting 11% yearly growth compared to the company's mid-to-high teens guidance.

While EVs are off to a promising start, both Citi and Macquarie acknowledged that operating income remains negative, with depreciation being a key drag. The real margin lift hinges on future levers like PLI approval, volume ramp-up, and mix improvements.

Macquarie flagged that some drivers of farm margin expansion like favourable export currency and input costs may reverse in the current fiscal, even though overall margins are expected to improve on an annual basis.

All in all, brokerages see the automaker as well-positioned to deliver earnings growth while navigating near-term volatility.