Mahindra and Mahindra reports 19.6% rise in consolidated net profit on strong automobile sales

Driven by strong automobile sales, Mahindra and Mahindra reported a 19.6 per cent rise in consolidated net profit at ₹3,180 crore with a 17.7 per cent increase in revenue in Q3FY25.

The company registered ₹41,464 crore in revenue from operations in the third quarter of this fiscal.

During the quarter, the company reported a 16 per cent volume growth in the automobile segment while a 20 per cent volume growth was reported in the farm segment.

EBITDA margin

The automobile sector reported an EBITDA margin of 9.7 per cent, while the farm segment reported a margin of 18.1 per cent.

A total of 2,45,000 vehicle units were sold by the automobile segment, while the farm segment registered sales of 1,21,000 vehicle units. The company’s SUV volumes were up 20 per cent in Q3, with a revenue market share of 23 per cent.

In the near term, the company is anticipating a 3 per cent growth for the industry in the light commercial vehicle segment with less than 3.5 tonnes and single-digit growth for the industry in passenger vehicles.

Further, the company announced the formation of a wholly owned subsidiary—Mahindra Advanced Technologies Ltd. The new company will focus on design, development, manufacturing, supply, dealing, operating, trading, overhaul, repair, maintenance, and security solutions services.

Tax relief

The company stated that it is expecting an uptick in sales of automobiles between ₹10 to ₹25 lakh after the budget announcement on the income tax relief. M&M offers the 3XO SUV in the sub-compact segment.

“With the income tax relief, products like 3XO will see better traction, as they go into the salaried segment. There will be an upside opportunity for demand and we may not be able to fully capitalise it. Our strategy is to play in the ₹9 lakh to ₹30 lakh segment band and we see an overall strong growth opportunity,” said Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector), M&M Ltd.

The company will ramp up production of 3XO and Thar Roxx in the next three to six months. M&M stated that in Q3 it witnessed a strong rural revival while the urban demand remained strong.

In the commercial vehicle segment, the company is expecting a demand pick up in the Medium and Heavy Commercial Vehicles (MHCV), “We sell 12,000 per annum MHCVs, the demand has been muted for a while, and we are hopeful with the investments in infrastructure it will pick up,” added Rajesh Jejurikar.

Commodity prices

“While the overall commodity appears benign on the surface when you look deeper, steel is the only reason for it to remain benign. Other raw materials have started creeping up, on the farm segment we are seeing challenges with rubber,” said Amarjyoti Barua, Group Chief Financial Officer, M&M Ltd.

In the international market, the group stated that it is relooking at the geographies,” There are markets where there are temporary disruptions either because of high interest or other factors that are creating a blip. There are also markets where there is a structured decline in categories including some European markets. We are looking at the overall farm international strategy to see the structural decline in the market and if we have a clear organic play in it,” added Amarjyoti Barua.