M&M Reports Impressive Growth In Q2, Auto Business Thrives Despite Market Challenges

Utility vehicle and tractor manufacturer Mahindra & Mahindra Ltd. unveiled a robust performance for the second quarter of the fiscal year, demonstrating a substantial 16% growth in standalone revenue compared to the same period last year.

The company achieved a remarkable topline figure of Rs 24,310 crore, with the primary driving force behind this growth being its thriving automotive business, which witnessed an impressive year-on-year growth of 22%, totalling Rs 18,405 crore. However, the farm equipment segment remained steady at Rs 5,919 crore, just slightly below the Rs 5,944 crore recorded during the same period last year.

Furthermore, Mahindra & Mahindra's operating profit, represented by EBITDA, displayed a substantial 20% growth, reaching Rs 2,935 crore in comparison to the previous year's Rs 2,443 crore. This surge in profitability also resulted in an expanded EBITDA margin, increasing by 50 basis points from last year to stand at 12.1%, up from 11.6%.

Despite these figures, the company experienced a slight setback in the highly competitive SUV market. Mahindra & Mahindra's SUV market share dipped to 19.9% during the September quarter, falling behind Maruti Suzuki India Ltd.'s 23.3% market share.

However, the automotive sector under Mahindra & Mahindra's umbrella reached a significant milestone during the quarter, achieving its highest-ever quarterly sales volume of 2.12 lakh units, marking an 18% growth compared to the same period the previous year. Moreover, the electric three-wheeler business reported a remarkable 74% growth year-on-year.

Anish Shah, MD & CEO of Mahindra & Mahindra, expressed his satisfaction with the company's performance, stating, "During Q2, operating performance across Auto, Farm, and Services was robust. Auto rapidly grew to double its operating profit. Farm continues to be resilient despite tough market conditions."

In addition to the impressive results in the auto sector, the company's tractor business displayed resilience, increasing its market share by 150 basis points during the quarter. This growth can be attributed to the introduction of new tractor models, including Oja, Swaraj Tractor, and Naya Swaraj, according to Rajesh Jejurikar, ED & CEO of the Auto and Farm Sector business.

Despite the positive financial performance, shares of Mahindra & Mahindra experienced a marginal dip of nearly 2%, trading at Rs 1,526.50 per share as of 2:45 pm post the earnings announcement.

Mahindra & Mahindra's second-quarter results reflect impressive growth in its automotive segment, significant resilience in the farm equipment business, and the introduction of successful tractor models.