M&M: Q3 earnings drive-in hope
Shares of Mahindra & Mahindra’s (M&M) soared 10% to hit the upper circuit on Monday morning, as the strong earnings performance for the fiscal third quarter drove investor frenzied buying.
On Friday, the SUV maker reported a 40% on-year jump in net profit. Revenue of the firm stood at Rs 14,057 crore, up 16% from the same period last year. It’s earnings before interest, tax, depreciation, and ammortisation (Ebitda) at Rs 3,520.4 crore, down 1% YoY. Ebitda margin came in at 16.3% for the quarter as compared to 18.4% reported in Q3FY20.
M&M’s third-quarter performance was driven by good performance in both, Tractors as well as Autos businesses.
The company has one of the highest exposures to the rural markets (65% of volumes), which would likely be less impacted by the on-going COVID-19 disruption.
M&M expects the industry to log 20% on-year growth in the tractor segment in the current fiscal year. Current production run rate for Thar is at nearly 3,000 units per month and would be ramped up to 4,000 units per month by April-May. Cumulative bookings as of date are at over 39,000. Further, the SsangYong deal is moving forward, but toward the PrePackage scheme and not the ARS scheme under the bankruptcy court.
This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. Also above note is not a recommendation to Buy or SELL and is only a view based on facts and figures and we will be in no way responsible for any losses incurred by anyone who uses this information to either trade or invests securities mentioned herein.