Empowering Progress : M&M Q4 Net Profit Rises 32% to Rs 2,038 Cr, Declares Rs 21.10 Dividend

Mahindra & Mahindra Ltd (M&M), one of India’s leading automobile manufacturers, has reported a significant increase in its standalone net profit for the fourth quarter of the financial year 2023-24. The company’s robust performance in the automotive segment, along with a favorable product mix and operating leverage benefits, contributed to this impressive growth. In this blog post, we will delve into the details of M&M’s Q4 financial results, its future plans, and the impact of its performance on the Indian automotive industry.

M&M’s Q4 Financial Performance

M&M reported a standalone net profit of Rs 2,038 crore for the March quarter, marking a substantial increase of 32% compared to Rs 1,549 crore in the year-ago period. This impressive growth can be attributed to several factors:

1. Robust Performance of the Automotive Segment: M&M witnessed a strong performance in its automotive segment, which contributed significantly to the increase in net profit.
2. Favorable Product Mix: The company benefited from a favorable product mix, which helped improve its profitability.
3. Operating Leverage Benefits: Operating leverage benefits also played a crucial role in driving the growth in net profit.

The company’s standalone revenue from operations rose by 11% to Rs 25,109 crore in Q4FY24, compared to Rs 22,571 crore in the same period last year.

Dividend Declaration and Investment in Electric Vehicles

Mahindra & Mahindra announced a dividend of Rs 21.10 per equity share of Rs 5 face value. Additionally, the company revealed its plans to invest Rs 12,000 crore in its electric vehicle (EV) unit, Mahindra Electric Automobile. This investment underscores M&M’s commitment to the development of electric vehicles and sustainable mobility solutions.

Business Highlights

1. Automotive Segment Performance: M&M maintained its position as the number one SUV player by revenue and gained a 3.5% market share in the Light Commercial Vehicles (LCVs) < 3.5T category. The company also improved its Auto Standalone PBIT margin by 190 basis points.
2. Tractor Segment Performance: Despite facing challenges due to sub-par rains affecting rural demand, M&M achieved a market share of 41.6% in the tractor segment, marking a gain of 40 basis points during FY24. The company also improved its core tractor PBIT margins by 30 basis points.

Analysts’ Expectations and Market Response

M&M’s Q4FY24 results surpassed analysts’ expectations. According to a Moneycontrol poll of six brokerage estimates, M&M was expected to report a net profit of Rs 2,026 crore, marking a 2.5% increase from the year-ago period. The company’s revenue from operations was predicted to increase by over 7% to Rs 24,182 crore.

At 2:25 pm on May 16, M&M’s shares were trading 0.8% higher at Rs 2,320 apiece. The market responded positively to the company’s strong financial performance and future growth prospects.

1. Standalone Net Profit Growth: M&M’s standalone net profit for the March quarter rose by 32% to Rs 2,038 crore compared to Rs 1,549 crore in the year-ago period, driven by the robust performance of the automotive segment, favorable product mix, and operating leverage benefits.
2. Standalone Revenue Growth: The company’s standalone revenue from operations increased by 11% to Rs 25,109 crore in Q4FY24, up from Rs 22,571 crore in the same period last year.
3. Dividend Declaration: M&M announced a dividend of Rs 21.10 per equity share of Rs 5 face value, reflecting the company’s commitment to delivering value to its shareholders.
4. Investment in Electric Vehicles: In line with its focus on sustainable mobility solutions, M&M revealed plans to invest Rs 12,000 crore in its electric vehicle (EV) unit, Mahindra Electric Automobile, demonstrating its commitment to the development of electric vehicles.
5. Market Performance and Analysts’ Expectations: M&M’s Q4FY24 results surpassed analysts’ expectations, with the company reporting a higher net profit and revenue from operations than predicted. At 2:25 pm on May 16, M&M’s shares were trading 0.8% higher at Rs 2,320 apiece, reflecting the market’s positive response to the company’s strong financial performance and future growth prospects.

Conclusion

Mahindra & Mahindra’s impressive performance in Q4FY24 underscores its resilience and ability to navigate through challenging market conditions. With a focus on electric vehicles and sustainable mobility solutions, the company is well-positioned to capitalize on emerging opportunities in the automotive industry. As a market leader in both the automotive and tractor segments, M&M remains committed to delivering value to its shareholders while driving innovation and growth in the Indian automotive sector.

Other : Advancing Defense: UK New Weapon Against Drone Threats