Stock Market

M&M Q4 profit up 6%, volume growth helps revenue beat estimates

Chillicious Team

Auto company Mahindra and Mahindra (M&M) missed analysts’ expectations on profit & operational front but revenue was ahead of estimates. Standalone profit grew by 6 percent to Rs 583.7 crore compared to year-ago period. Profitability was supported by other income (that increased 24.6 percent at Rs 112 crore, including dividend income) and lower finance cost but hit by higher tax cost.

Revenue increased 14.5 percent to Rs 10,800.8 crore in Q4 against Rs 9,434.4 crore in corresponding period of last fiscal on healthy volume growth in both auto and tractor segment.

Auto sales volume jumped 14 percent to 1.4 lakh units and tractor sales grew by 12.2 percent to 43,321 units compared to year-ago period.

Profit was expected at Rs 628 crore on revenue of Rs 9,950 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. Operating profit was estimated at Rs 1,145 crore and margin at 11.6 percent.

Operating profit (EBITDA – earnings before interest, tax, depreciation and amortisation) rose by 16.4 percent YoY to Rs 1,049 crore and margin expanded by 30 basis points to 9.7 percent in Q4.

M&M said farm equipment revenue increased 8.9 percent YoY to Rs 2,743 crore in Q4. Farm segment’s EBIT (earnings before interest & tax) rose 24.7 percent to Rs 353.3 crore but margin contracted by 240 basis points at 12.9 percent compared to year-ago period.

Finance cost during the quarter dropped 39.4 percent to Rs 38.14 crore while tax expenses jumped 27 percent to Rs 214.5 crore YoY.

The company has exceptional gain of Rs 5.99 crore in Q4 related to profit on sale of long term investment.

Consolidated profit jumped 14 percent to Rs 668 crore and revenue grew by 16 percent to Rs 11,669 crore compared to year-ago period.

At 14:27 hours IST, the scrip of Mahindra and Mahindra was quoting at Rs 1,332, down Rs 3.15, or 0.24 percent on BSE.