The Economic Times daily newspaper is available online now.

    Is M&M’s strong Q2 performance sustainable? Mitul Shah explains

    Synopsis

    “In the tractor segment, EBIT margin has improved by 40 bps sequentially. It came close to 17% EBIT margin whereas on the other end, auto segment EBIT margin has also improved by 45 basis point to 6.1%. These two are not in line with the trend which we have seen for other companies and this is a positive surprise. ”

    Is M&M’s strong Q2 performance sustainable? Mitul Shah explainsAgencies
    “There is a significant jump in other income, almost 20% increase YoY and more than four-fold on a sequential basis, primarily because dividend from the associates and the subsidiary which was last year Rs 851 crore, this time came close to Rs 1,100 crore. So the major difference in terms of higher bottom line is primarily from dividend income,” says Mitul Shah, Head of Research, Reliance Securities.

    What is your take on Mahindra & Mahindra Q2 results? Do you see these numbers sustaining from here on? In the second quarter, the monsoon effect was there?
    Yes the numbers definitely denote very strong performance, even on revenues front it is slightly higher than our as well as Street expectation. The margins are in line but we should note that a few days ago, competitor Escorts reported highly subdued performance for the tractor segment. Compared to that, this is a positive surprise.

    Unlock Leadership Excellence with a Range of CXO Courses

    Offering CollegeCourseWebsite
    IIM KozhikodeIIMK Chief Product Officer ProgrammeVisit
    Indian School of BusinessISB Chief Technology OfficerVisit
    IIM LucknowIIML Chief Operations Officer ProgrammeVisit
    In this case, in the company’s FES segment, that is the tractor segment, EBIT margin has improved by 40 basis points sequentially. It came close to 17% EBIT margin whereas on the other end, auto segment EBIT margin has also improved by 45 basis points to 6.1% so these two are not in line with the trend which we have seen for other companies and this is a positive surprise.

    On the bottom line, there is a significant jump in other income, almost 20% increase YoY and more than four-fold on a sequential basis, primarily because dividend from the associates and the subsidiary which was last year Rs 851 crore, this time came close to Rs 1,100 crore. So a major difference coming in terms of higher bottom line is primarily from the dividend income.



    (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