M&M hits 52-week high ahead of Q4 results, revenue growth seen at 8% YoY on volume growth; Time to buy?

Mahindra & Mahindra (M&M) hit its fresh 52-week high mark at ₹2,317.50 on the BSE earlier today ahead of the announcement of its January-March quarter results for fiscal 2023-24 (Q4FY24) due tomorrow, May 16. Shares of M&M have been on an uptrend since January this year on strong fundamentals as the auto major has been recording strong volume growth and robust sales in the past few months. 

Earlier, M&M's wholly-owned subsidiary Mahindra Holdings executed a share purchase agreement for sale of its entire stake in New Delhi Centre for Sight (NDCFS). The proposed transaction will involve Mahindra Holdings selling 30.8 per cent of the paid-up capital of NDCFS to Space Investments, Defati Investments Holding BV, and Infinity Partners in a fully diluted basis for ₹425.4 crore.

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M&M Share Price Trend

Shares of M&M opened at ₹2284.35 and gained 1.45 per cent to hit a fresh 52-week high of ₹2,317.50 apiece on the BSE, before settling 1.41 per cent higher at ₹2,302.55 apiece on the BSE. According to Trendlyne data, shares of M&M have given 39.94 per cent returns to investors in the last three months and 49.48 per cent in the last six months. 

According to brokerages, M&M is expected to benefit from its production ramp up which shall result in fulfillment of orders at a better pace. New launches in the electric vehicle (EV) segment as well as refresher of the existing models.

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M&M Q4 Results Preview

Domestic brokerage firm Prabhudas Lilladher estimates that M&M's revenue/EBITDA/net profit is likely to grow at a CAGR of 11.7 per cent/17 per cent/13.4 per cent respectively in the March quarter. M&M has emerged as one of the top auto picks for the brokerage along with Maruti Suzuki. 

The Mahindra Group company's overall auto sales including exports for the month of April 2024 grew 13 per cent to 70,471 vehicles. M&M said its utility vehicles segment saw a growth of 18 per cent, having sold 41,008 vehicles in the domestic market. The domestic sales for commercial vehicles stood at 22,102, it said.

At the same time, Mahindra’s farm equipment sector sold 35,805 units in India in April 2024, as against 35,398 units in the same period last year. Total tractor sales during April 2024 increased to 37,039 units, as against 36,405 units for the same period last year. Exports for the month stood at 1,234 units, registering a growth of 23 per cent over last year, said M&M.

‘’M&M's revenue is expected to grow by 8.1 per cent year-on-year (YoY) which will be largely driven by 13.8 per cent volume growth in the automotive divison and partially offset by decline in FES segment. Decline in tractor volume should offset RM cost benefit leading to flattish EBITDA margin,'' said the brokerage.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.