The Economic Times daily newspaper is available online now.

    M&M Q1 results preview: Profits may decline 80%, sales likely to halve

    Synopsis

    The auto major is likely to report a more than 80 per cent erosion in its net profit from a year ago, while sales may have more than halved.

    M&M
    Prabhudas Lilladher expects M&M to post a 80.4 per cent decline in adjusted net profit, while it sees its sales declining by 56 per cent.
    Mumbai: Mahindra & Mahindra is likely to replicate its peers and post a disappointing performance in the quarter ended June, hit by Covid-19 pandemic induced lockdown.

    The auto major is likely to report a more than 80 per cent erosion in its net profit from a year ago, while sales may have more than halved.

    Prabhudas Lilladher expects M&M to post a 80.4 per cent decline in adjusted net profit, while it sees its sales declining by 56 per cent.

    The brokerage said M&M’s overall volumes for the quarter were lower by 56.3 per cent year-on-year (YoY) and 37.2 per cent quarter-on-quarter (QoQ), where tractors were down around 24 per cent YoY.

    Edelweiss expects the company to post a 85.3 per cent decline in the core net profit, while revenues may have plummeted 58.9 per cent.
    « Back to recommendation stories
    I don't want to see these stories because
    SUBMIT

    Despite the steep fall in revenues, the brokerage expects M&M’s EBITDA margins to decline by only 3.5 per cent YoY to 10.6 per cent cushioned by a significantly higher share of tractors at around 68 per cent, compared with 40 per cent a year ago.

    Kotak Institutional Equities expects the company to see its net profit drop by 85 per cent, while net sales may have dropped 56.6 per cent. It expects EBITDA to decline by 56 per cent YoY due to negative operating leverage in the quarter.

    Recently, M&M reported a 33 per cent year-on-year (YoY) decline in its domestic vehicle sales to 24,211 units in July. Sequentially, however, volumes grew, with sales at 18,505 units in June.

    However, on the farm equipment front, the company recorded its best ever July sales at 24,463 tractors, growing a robust 28 per cent YoY.

    The June quarter has been a washout quarter for all auto majors alike.

    Last week, Maruti Suzuki, India’s largest carmaker reported a loss of Rs 249.3 crore in the June quarter—its first since its listing in June 2003. Two-wheeler maker Bajaj Auto posted 53.1 per cent year-on-year (YoY) fall in net profit at Rs 528 crore for the June quarter.



    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

    Stories you might be interested in