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Prabhudas Lilladher Report
Mahindra and Mahindra Ltd. posted a decent operating performance amidst challenging raw material scenario.
Q2 FY22 Ebitda margin came below our estimates and impacted raw material inflation as well as weak mix. Despite sharp price hikes taken by the company, tractor segment’s Ebit margin came in at 18.7% (down 570/down 160 basis points YoY/QoQ) while automotive segment was at 2.7% (down 380/down 100 bps YoY/QoQ).
However, new product launches in automotive segment are seeing good traction with ~70,000 plus bookings for XUV700 and overall orderbook of ~160,000 units.
M&M mentioned that due to erratic monsoons, price hikes and higher base tractor demand is seeing some moderation and expect flat to low single digit growth in FY22. Thus focus is on farm machinery segment with an intention to make it ~10 times by FY27.
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