Mahindra & Mahindra (M&M) unveiled its Q2 results today, disclosing a 15% YoY decrease in consolidated profit to ₹2,348 crore ($317 million), and a parallel drop in sales to ₹34,436 crore ($4.65 billion). Despite the overall downturn, the company reported a significant 67% YoY surge in standalone profit after tax (PAT) for the September quarter to ₹3,452 crore ($466 million), spurred by SUV demand, supply chain enhancements, and improved order fulfillment.
The company's revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) also increased by 17% and 24%, reaching ₹25,773 crore ($3.48 billion) and ₹4,397 crore ($594 million) respectively. Standalone revenue and EBITDA saw growth of 16.6% and 20%, respectively, improving the EBITDA margin to 12.1%.
In the sector-wise performance for Q2, M&M's Auto sector managed to double its operating profit. The automotive division reported robust growth with revenues up by 22% and profits soaring by 88%, achieving an all-time high in quarterly volumes with an 18% increase. Electric three-wheeler sales also grew substantially by 74%, contrasting a slight dip in tractor sales by 4%.
The Farm sector showed resilience amidst market challenges, maintaining its performance levels. The Services sector hinted at a potential turnaround with Mahindra & Mahindra Financial Services Limited (MMFSL) recording its lowest-ever Gross Stage 3 (GS3). Tech Mahindra (TechM), despite experiencing a challenging quarter, has embarked on a transformation journey.
CEO Anish Shah highlighted the H1 PAT growth of 18%, indicating significant progress towards their strategic transformation of core businesses and their goal to meet the '5x challenge' for growth gems. The '5x challenge' is an internal target set by M&M to multiply certain business metrics by five times.
Overall, while M&M's consolidated figures show a decline in Q2, the robust performance of its standalone PAT and certain sectors suggest potential areas of strength and growth within the company. However, despite these positive standalone results, the consolidated net profit decline of 15% despite a revenue growth of 15%, triggered a 1.83% fall in M&M's stock price today.
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