M&M Q3 results: Profit rises 20% to Rs 3,181 crore on strong auto volumes

Mahindra and Mahindra (M&M) posted a 20 per cent rise in consolidated profit after tax (PAT) at Rs 3,181 crore in Q3FY25, riding on strong auto and farm segment numbers, which saw volumes grow by 16 per cent during the quarter.

 

The company also posted a strong revenue growth of 17 per cent at Rs 41,470 crore.

 

The numbers came in line with the Bloomberg analyst estimates. M&M stock was up 1.86 per cent on the BSE.

 

Anish Shah, managing director (MD) & chief executive officer (CEO), M&M, said, “Auto and Farm delivered solid performance on market share and margins, on the back of focused execution. Transformation at Tech Mahindra is gathering momentum. Mahindra & Mahindra Financial Services Limited (MMFSL) continues to balance asset quality and growth priorities, with GS under 4 per cent on the back of strong assets under management (AUM) growth. Our growth gems are demonstrating steady progress towards their long-term objectives.”

 

 

Auto quarterly volumes were up 16 per cent during the quarter to 245,000 units. Utility vehicle sales came in at 142,000 units. Auto sector PAT was up 20 per cent to Rs 1,438 crore while the revenue rose 21 per cent to Rs 23,391 crore. Auto standalone margins have been improving – from 6.6 per cent in Q3FY23 to 8.5 per cent in Q3FY24 and 9.7 per cent in Q3FY25.

 

M&M ranked No.1 with revenue market share of 23 per cent, up 200 basis points (bps), with SUV volume growth of 20 per cent in Q3. It also had the top market share in light commercial vehicles under 3.5 tonnes at 51.96 per cent, up 230 bps.

 

It also enjoyed a 41.8 per cent share in electric three-wheelers.

 

The farm segment also did well seeing the highest ever Q3 market share at 44.2 per cent, with a 20 per cent jump in volumes to 121,000 units.

 

Farm sector PAT was up 11 per cent to Rs 996 crore on an 11 per cent rise in revenue to Rs 9,537 crore.

 

M&M is the market leader in tractors with a 44.2 percent share, up 240 bps.

 

Rajesh Jejurikar, executive director & CEO (Auto and Farm Sector), M&M said, “In Q3FY25, we were No. 1 in SUV revenue market share with 200 bps year-on-year (Y-o-Y) increase. We achieved the highest ever Q3 tractor market share at 44.2 per cent, a gain of 240 bps.”

 

As for other segments, MMFSL’s AUM was up 19 per cent; Tech Mahindra’s earnings before interest and taxes (Ebit) were up 480 bps, and it continued to focus on margin expansion.

 

Amarjyoti Barua, group chief financial officer (group CFO), M&M said, “Our Q3 consolidated results reflect strong performance across multiple businesses despite global headwinds. Our operating businesses remain laser focused on execution and we remain committed to disciplined capital allocation to drive long-term shareholder value creation.”

 

Beefing up sales and service network 

 

M&M is getting ready to hit the market with its new electric vehicles BE 6 and XEV 9e from this month as it opens bookings from February 14. Initially, 250 outlets will be showcasing these cars, and the company is trying to up the experience in a phased manner. “We have already upgraded our showrooms to showcase the EVs and also strengthened the quality of manpower. We have hired 500 people and trained them as these are high-tech products. The dealers have also hired around 1,700 people,” Jejurikar said.

 

Moreover, from now on, M&M would be making the battery electric vehicles (BEVs) and selling them to Mahindra Electric Automobile Ltd (MEAL), which, in turn, will be selling it exclusively.

 

M&M will be contract manufacturing the EVs for MEAL. Explaining the rationale behind the contract manufacturing arrangement, Jejurikar said, “We have created a separate body shop and assembly line for the EVs (at Chakan), but we leverage all the utilities and the paint shop as common for the rest of the portfolio of products. So, keeping the manufacturing of the Born EV vehicles within the Chakan plant allows us to leverage the synergy and manage fungibility of labour across shops.” 

 

He added that if it were to set up a separate greenfield project only for EV assembly, then it would lose the value of all the synergy that it can get by leveraging on full sweating of the assets.

 

From the next quarter, the auto standalone numbers would reflect sales to MEAL.

 

“BEV products on rupees per vehicle basis may have a similar net variable margin as internal combustion engine (ICE) products on a matured basis. However, in percentage terms, they will always be lower due to higher denominator,” M&M added. 

 

Mahindra to expand 3XO, Thar capacities

 

M&M is exploring capacity ramping up options for its popular sub-compact SUV model 3XO, which is also performing well in the South African market.

 

As of now, it has a capacity to make 9,000 3XOs a month and is witnessing a strong demand for the gasoline version (as high as 70 per cent of total sales volumes).

 

Rajesh Jejurikar, executive director (ED) & CEO, auto and farm sectors, M&M, said that with the income tax relief (in the Budget), products like the 3XO will get traction as a lot of it actually goes to the salaried class. 

 

Also, there are 9,000 units per month capacity for the Thar (3 door and 5 door variants combined). Of this, around 70 per cent is used for the Roxx which has a high wait period. M&M is trying to increase capacities of the Thar variants too.