M&M Q1 Preview: Net profit down, revenue may inflation 17% on auto, tractor recovery

Mahindra & Mahindra Limited, one of India’s largest four-wheeler manufacturers, is scheduled to release its earnings report for the first financial quarter of FY2025 on July 31. Volume growth, strong performance from the auto segment and recovery in tractors are expected to be driven by growth in volumes. The company’s sales reached double-digit growth rates.
According to a Moneycontrol poll, the Thar maker is projected to register 17 percent year-on-year growth in revenue, reaching Rs 28,166 crore. Net profit is estimated to decline by 2 per cent to Rs 2,678 crore from Rs 2,737 crore in the same quarter last financial year.
Earnings estimates from analysts surveyed by Moneycontrol are in a tight range, indicating that any positive or negative surprise could trigger a sharp reaction in the share price.

What factors are affecting M&M’s earnings?

Improvement in tractor segment: Revenues are likely to be driven by 13 percent growth in the tractor segment, including 6 percent growth in volumes and 15 percent growth in automotive segment revenues, driven by significant improvement in average selling price (ASP). Inspired by. , “Expectations of an above average monsoon are likely to drive tractor demand in 2HFY25,” HDFC Securities said in a note.
Strong SUV Sales: M&M is the second largest SUV company after Maruti. During the quarter, HDFC Securities said the company has outperformed Tata Motors (the third largest SUV company) for the fifth consecutive quarter. The brokerage said M&M has registered a 24 percent year-on-year growth in SUV sales.
Kotak Institutional Equities said, “We estimate 80 basis points quarter-on-quarter improvement due to richer segmental mix (tractor segment volume mix 39 per cent in 1QFY25 vs 27 percent in 4QFY24), partly driven by crude oil prices. Will remove goods bottlenecks.” In a note.

What to see at the quarterly show?

Analysts suggest that raw material prices and advertising spend are the key factors to focus on due to the launch of the XUV 3XO.
M&M has been the best performing stock on the Nifty, rising a whopping 72 percent since the beginning of the year.