M&M's Second Quarter Profits Skyrocket by 67% to ₹3,452 Crores; Revenue Rises by 17%

11 Nov, 2023

M&M's Second Quarter Profits Skyrocket by 67% to ₹3,452 Crores; Revenue Rises by 17%

Mahindra & Mahindra Group witnessed a substantial leap in their standalone profit, soaring by 67% to ₹3,452 crore in the second quarter of the fiscal year 2023-24 compared to the ₹2,068 crore profit from the previous year. The company experienced a remarkable 17% surge in revenue, reaching ₹25,773 crore, while the EBITDA ascended by 24% Year-on-Year to ₹4,397 crore, compared to the ₹3,539 crore in the corresponding period from the previous year.

During the July-September quarter, M&M sold a total of 2,12,078 vehicles, marking an 18% increase. However, tractor sales saw a 4% decline, falling to 89,101 compared to 92,590 in the corresponding quarter of the previous year.

In a stock exchange filing, the company expressed satisfaction with their robust operational performance across all sectors except Tech Mahindra. The automotive segment exhibited rapid growth, while the farm sector demonstrated resilience despite challenging market conditions. The company highlighted their progress in various growth sectors as on track.

Anish Shah, Managing Director & CEO of M&M Ltd, noted the robust operating performance across automotive, farming, and services during Q2. He mentioned the significant growth in the automotive sector's operating profit and the resilience of the farm segment in adverse market conditions. Shah also acknowledged the progress in Mahindra Finance Limited's services and the advancements in the growth areas, aligning with their ambitious 5x challenge.

However, Tech Mahindra faced challenges during the quarter due to weak demand and exits from non-core accounts. Shah indicated the initiation of a transformation journey within the business.

On the financial front, consolidated Q2 revenue surged by 20% to ₹18,869 crore, and the consolidated Q2 PAT doubled to ₹1,015 crore.

The farm segment reported a notable increase in tractor market share, reaching 41.6%, the highest in a decade. Yet, the segment experienced a dip of 4% in consolidated revenue, with the consolidated PAT recorded at ₹800 crore, a 7% decline.

The services segment encountered a decline in both profit and revenue. Despite this, M&M emphasized the progress of its growth gems. Various sectors under services, including Mahindra Lifespaces, Club Mahindra, and Mahindra Logistics, reported their individual performances and achievements.

Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector) of M&M, highlighted the company's maintenance of SUV revenue market share and the improvement in auto standalone PBIT margins. He also noted the increase in market share within the tractor business.

Group CFO Manoj Bhat underlined the strong H1 F24 operating performance and the focus on operational metrics and value creation through capital allocation actions.

As a result of these developments, M&M's shares experienced a 1.93% decline, currently trading at ₹1,523.15 on the BSE. The company's market capitalization stands at ₹1,89,495.14 crore, with the stock hitting a one-year high of ₹1,670 on September 18, 2023.