Mahindra & Mahindra (M&M) is set to announce its second quarter results on Tuesday, with analysts projecting a mixed bag of growth and challenges. According to Bloomberg estimates, the company is expected to see significant revenue growth, albeit with some pressure on margins.

Revenue and Profit Outlook

M&M's standalone revenue is anticipated to show strong growth:

The revenue growth is primarily attributed to healthy demand for passenger vehicles and a recovery in tractor sales.

Operating Performance

Despite the revenue growth, operating performance is expected to face some headwinds:

The decline in operating income and margin is likely due to higher discounts, cost pressures, and an unfavorable product mix.

Brokerage Insights

Various brokerages have shared their expectations for M&M's Q2 performance:

• UBS: Expects M&M to outperform peers with strong passenger vehicle volumes.
• JPMorgan: Forecasts 20% year-on-year EBITDA growth, led by the tractor segment.
• BofA Securities: Anticipates 19% operating profit growth, aided by early festive season tractor sales. However, they note that auto segment margins may slip due to promotional offers and increasing EV share.
• HSBC: Observes that discounts increased across models, and average selling prices fell by 3% due to weaker product mix and festive schemes.

Challenges and Pressures

The company faces several challenges in the current quarter:

1. Increased discounts across models
2. Weaker product mix affecting average selling prices
3. Rising input costs for materials such as copper, aluminum, and precious metals
4. Pressure from promotional offers and increasing EV share in the auto segment

As Mahindra & Mahindra prepares to release its Q2 results, investors and analysts will be closely watching how the company navigates these challenges while capitalizing on the strong demand in certain segments.

Mahindra & Mahindra (M&M) shares climbed 3% to Rs 3,590.00 following the announcement of record-breaking monthly sales figures for October. The automotive giant reported impressive growth across its vehicle segments, showcasing strong performance in both the automotive and farm equipment sectors.

Record-Breaking Sales Performance

M&M's total vehicle sales, including exports, reached 120,142 units in October, marking a substantial 26% year-on-year increase. The company's performance was particularly notable in the following areas:

SUV Segment Shines

The domestic SUV sales hit an all-time high of 71,624 units, demonstrating the strong demand for M&M's sport utility vehicles. CEO Nalinikanth Gollagunta attributed this exceptional performance to the new editions of popular models launched in October:

• Thar
• Bolero
• Bolero Neo

Tractor Division Growth

The farm equipment sector also showed robust growth, with domestic tractor sales increasing by 12% to 72,071 units. Veejay Nakra, President of the Farm Equipment division, credited this growth to favorable factors such as:

• Good monsoon season
• GST rate cuts

Upcoming Quarterly Results

Investors are anticipating Mahindra & Mahindra's quarterly earnings announcement scheduled for November 4. Analyst estimates project:

Future Electric Plans

In an exciting development for electric vehicle enthusiasts, Mahindra announced its upcoming electric SUV, the XEV 9S. Built on the INGLO platform, this new model is set to premiere on November 27, potentially marking a significant step in M&M's electric vehicle strategy.

The strong sales performance across both automotive and farm equipment sectors, coupled with the upcoming launch of a new electric SUV, signals Mahindra & Mahindra's robust position in the market. As the company prepares to release its quarterly results, investors will be keenly watching to see if this sales momentum translates into strong financial performance.