M&M Q4 Results: Net profits jumped 28%, Rs 16.25 per share dividend declared

Commercial vehicle giant Mahindra & Mahindra, popularly known as M&M recently announced its results for the Jan - Mar ‘23 period. The automaker reported a growth in both revenues and profits from the previous year. Notably, this can be an indication of a revival in rural demand as a core segment of the company’s operations cater to this populace.

This is further reaffirmed by the strong share price performance of the M&M stock in recent times. In 2023 so far, the M&M share price has gained about 5% while over the past year it has increased by close to 33%.

So, what made the M&M revenue and profits rise in the March quarter? Did the M&M Q4 results match expectations? How were the M&M vehicle sales in the March quarter? Did M&M margins improve? What was the M&M dividend? How much profits did M&M report in the Jan - Mar ‘23 period? Let’s try and decode!

Decoding M&M Q4 earnings

M&M revenues:

• M&M reported consolidated revenues of Rs 32,366 crores for the Jan - Mar ‘23 period. This denotes a growth of 25% from the previous year. Rise in the volume of vehicles sold and visible signs of gradual revival in rural demand can be attributed as the primary drivers of revenue growth for the company.
   
• Revenues from the core auto segment jumped by 34% from the previous year to Rs 16,742 crores. New vehicle launches along with regaining the pole position in terms of market share in the SUV space assisted in the overall revenue growth for the segment.
   
• Two other key segments of the company i.e. Farm Equipment and Financial Services also witnessed a rise in the March quarter from the previous year. While revenues from the Farm Equipment segment increased by almost 30% yearly to Rs 8,023 crores, Financial Services revenue rose by 20.2% from the prior year to Rs 3,420 crores.

M&M margins: Operating margins for the core auto segment at the end of the March quarter stood at 12.4%. This compares favorably with the previous year’s figure of 11.2%.

Moreover, operating profits rose by 44% from the previous year to Rs 2,797 crores for the Jan - Mar ‘23 period.

M&M vehicles: M&M sold a total of 1,89,227 vehicles in the Jan - Mar ‘23 period, up 21% from the previous year.

Tractor sales also increased by 24% from the prior year to 89,128 vehicles in the March quarter.

M&M divided: M&M declared a dividend of Rs 16.25 per share. The dividend will be paid after August 4, 2023 to shareholders of record as of 14th July, 2023.

M&M net profits:  M&M reported a 28% yearly jump in consolidated net profits (before exceptional items) to Rs 2,600 crores for the Jan - Mar ‘23 period. In the year-ago period, the company reported net profits of Rs 2,026 crores in the same period.

M&M Q4 results: Analyst target price

Macquarie: The renowned brokerage has a “Buy” rating on the stock with a price target of Rs 1,536. The firm highlighted robust tractor demand and solid passenger vehicles order book as the primary drivers for M&M share price growth in the near term.

Goldman Sachs: The top global brokerage has a “Buy” rating on the stock with a price target of Rs 1,530. Relative strength in terms of vehicular sales numbers compared to its competitors has been cited as a major driver that can lead to M&M share price growth.

Nuvama: The leading brokerage has a “Buy” rating on the stock with a price target of Rs 1,430. Rising production capabilities coupled with a solid order book have been cited as major contributors by the firm to eventual M&M share price growth.

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