Emkay Global expects M&M to log a standalone profit after tax (PAT) of Rs 1,490.60 crore, up 13.7 per cent YoY over Rs 1,311 crore. Revenues are seen rising 7.5 per cent YoY to Rs 12,464 crore from Rs 11,590 crore.
“Revenues should grow on higher volumes (3 per cent YoY) and realisation (5%). Ebitda margin should contract notably due to an adverse mix i.e. lower share of tractors) and delays in the pass-through of commodity inflation. Other income is likely to surge 123 per cent to Rs 860 crore, due to the receipt of higher dividends from Tech Mahindra and M&M Financial services.
Auto volumes for the quarter grew 11 per cent YoY while tractor sales fell 5 per cent during the same period. Raw material cost inflation and lower contribution from farm segment, which commands higher margins, could compress operating margin to 13 per cent, BOB Capital Markets said. Nirmal Bang Institutional Equities is pegging Ebitda margin at 13.4 per cent as higher input costs are expected to be partly offset by positive operating leverage and cost-control initiatives.
On an adjusted basis, this brokerage sees adjusted profit falling 31 per cent YoY to Rs 894 crore.
Kotak Institutional Equities said: “We estimate a 7 per cent YoY increase in revenues led by 14 per cent YoY increase in automotive revenues led by 10.5 per cent YoY increase in volumes and flattish YoY tractor segment revenues led by 5 per cent YoYincrease in ASPs, offset by 5 per cent YoY decline in volumes.”
