Mahindra & Mahindra Q4 preview: Profit may fall over 50% YoY

New Delhi: Mahindra & Mahindra (M&M) is likely to post over 50 per cent year-on-year (YoY) fall in net profit in the March quarter due to 35 per cent YoY drop in total volumes. The auto major is slated to announce its Q4 results on Friday.

Kotak Institutional Equities sees 55.70 per cent YoY drop in bottomline on 40.10 per cent fall in topline growth.

An assessment by Reliance Securities projects 67 per cent hit in consolidated net profit due to 38.70 per cent and 54.70 per cent drop in sales and EBITDA, respectively.


In general, the auto industry witnessed a highly subdued volume performance in Q4FY20, primarily impacted by nationwide lockdown during the second half of March 2020 and the disruptions led by BS-VI transition.

Volume declined by higher-double digits as BS-IV inventory liquidation restricted wholesale dispatches towards the end of the quarter.

Brokerage firm Motilal Oswal expects 60.8 per cent YoY fall in net profit for Mahindra & Mahindra. “Decline in volumes adversely affects margins,” it said.

Shares of the company closed 0.19 per cent higher at Rs 474.45 on Thursday, while the benchmark BSE Sensex settled 2.07 per cent down at 33,538.

Nirmal Bang Securities said that earnings of Mahindra & Mahindra are likely to see a sharp decline sequentially, led by 27 per cent QoQ decline in volume and negative operating leverage.

“Higher discount on BS-IV inventory, only partial pass-through of BS-VI cost and negative operating leverage on Covid-19 related shutdown are likely to affect the margins,” it said. The brokerage projects 58.20 per cent YoY and 54.20 QoQ fall in net profit.