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Systematix Research Report
Mahindra and Mahindra Ltd.'s Q2 FY22 Ebitda margin was in line with our estimates as raw material inflation and the weak mix was offset by a sharp increase in average selling price.
Tractor segment Ebit margin came in at 18.7% (dwon 570 basis points YoY) while the automotive segment was at 2.7% (down 380 bps YoY).
In the automotive segment, the company has seen decent success in new product launches and has an order book of over 160,000. Supply chain constraints have restricted production, and the management expects these constraints to continue.
M&M plans to launch multiple electric vehicles over the next five years starting with two new models in FY23 (E-KUV and E-XUV 300).
The management expects the tractor industry to see flat to low single-digit growth in FY22 and we remain skeptical about the growth beyond FY22E as it nears its cyclical peak.
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