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Mahindra & Mahindra Limited — Q2 FY25
M&M delivered a strong Q2 FY25 with consolidated PAT up 35% YoY to INR 3,171 crore, driven by broad-based strength across auto, farm, and services.
bullish
high
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M&M delivered a strong Q2 FY25 with consolidated PAT up 35% YoY to INR 3,171 crore, driven by broad-based strength across auto, farm, and services. Auto revenue grew 15% YoY with PBIT margin expanding 140bps, supported by market share gains (21.9%) and successful price repositioning of XUV700. Farm domestic margins improved 150bps to 18.7% despite international headwinds. Services PAT surged 80% YoY, led by Tech Mahindra and Mahindra Finance. Management guided for mid-to-high teens auto volume growth and 6-7% tractor industry growth in H2, with EV launches (BE 6e, XEV 9e) in early 2025. Key risk: elevated launch costs and EV ramp-up may pressure near-term margins.
M&M ने दूसरी तिमाही (जुलाई-सितंबर 2024) में शानदार प्रदर्शन किया। कंपनी का कुल मुनाफा पिछले साल की तुलना में 35% बढ़कर 3,171 करोड़ रुपये हो गया। यह वृद्धि ऑटो, कृषि और सेवाओं तीनों क्षेत्रों में मजबूती से आई। ऑटो सेक्टर की आय 15% बढ़ी और मुनाफा मार्जिन 1.4% सुधरा, क्योंकि XUV700 की कीमत सही रखी गई और बाजार हिस्सेदारी 21.9% पहुंची। कृषि क्षेत्र में घरेलू मार्जिन 18.7% हो गया। सेवाओं (टेक महिंद्रा और महिंद्रा फाइनेंस) का मुनाफा 80% उछला। कंपनी को उम्मीद है कि ऑटो बिक्री 15-17% और ट्रैक्टर उद्योग 6-7% बढ़ेगा। 2025 की शुरुआत में नई इलेक्ट्रिक गाड़ियां (BE 6e, XEV 9e) लॉन्च होंगी। लेकिन नई लॉन्च की लागत और EV उत्पादन बढ़ने से निकट भविष्य में मुनाफा कम हो सकता है।
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International farm business stress
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Auto Revenue Market Share
21.9%
+2pp YoY
Auto revenue market share increased by almost two percentage points versus last year.
Farm Domestic Market Share (YTD Oct)
43.9%
+1pp YoY
Farm market share reached 43.9% year-to-date October, up about one percentage point.
SUV Volume Growth Guidance
15%-18%
N/A
Management expects full-year SUV portfolio volume growth of 15%-18%.
Tractor Industry Growth Outlook (H2)
13%-15%
N/A
Revised tractor industry growth outlook for second half to 13%-15%.
What Changed vs Last Quarter
NEW
EV launches in early 2025
Two electric origin SUVs (BE 6e and XEV 9e) to be revealed in November 2024 and in market early 2025.
NEW
Auto PBIT margin medium-term goal of ~10%
Management targets auto PBIT margin to first reach FY19 levels of around 10% as a medium-term goal.
UPDATED
Auto volume growth of mid-to-high teens
Management expects full-year SUV portfolio volume growth of 15%-18%.
UPDATED
Tractor industry growth of 6-7% for FY25
Revised tractor industry growth outlook to 6%-7% for the full year, implying 13%-15% H2 growth.
DROPPED
Logistics express business breakeven by end of Q2 FY25
Management committed to turning around the express logistics business to breakeven by the end of the current quarter.
DROPPED
Effective tax rate ~23-24% for FY25
CFO guided effective tax rate for FY25 to be approximately 23-24%.
NEW RISK
International farm business stress
North American tractor market has shrunk significantly (11 quarters of degrowth) and Turkish hyperinflation impacts accounting; management is evaluating but not exiting yet.
NEW RISK
Urban demand slowdown
Management acknowledged fundamental stress in urban India, which could impact SUV demand if not offset by rural recovery.
NEW RISK
EV launch costs and margin dilution
Q3 will see marketing and depreciation costs for EVs with no revenue, and EV margins as a percentage will be lower than ICE due to denominator effect.
NEW RISK
LCV demand recovery uncertainty
LCV industry has been subdued for several quarters; while October showed positive turnaround, sustainability is uncertain.
RISK GONE
Tepid industry demand environment
Overall auto industry buoyancy is low, which could pressure volume growth despite product launches.
RISK GONE
Commodity price risk (rubber) for tractor margins
Rising rubber prices could impact tractor margins, which are sensitive to input costs.
RISK GONE
Policy uncertainty in EV incentives
Changes in FAME/EMPS schemes create volatility in last-mile mobility profitability and require recertification costs.
RISK GONE
Potential cannibalization from Thar 5-door
Thar 5-door launch may cannibalize Thar 3-door volumes, creating near-term uncertainty in billing.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24, Q3 FY24
Capacity expansion on track to 49,000 units per month by end of current quarter, though near-term volumes may be impacted by XUV300 ramp-down.
Mentioned in Q1 FY24, Q2 FY24, Q3 FY24
TechM profit down 61%; management acknowledged it as a sore spot and expects recovery but with uncertainty.
Mentioned in Q2 FY24, Q4 FY24
Global EV slowdown and low penetration in India may impact BEV launch success; management relies on 'wow' products to drive demand.
Mentioned in Q1 FY24, Q2 FY24
Management expects farm machinery revenue to grow about 40% for the full year, up from 35% in H1.
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Guidance and risk preview
Management expects full-year SUV portfolio volume growth of 15%-18%.
North American tractor market has shrunk significantly (11 quarters of degrowth) and Turkish hyperinflation impacts accounting; management is evalu...
View Risks →