M&M Q4 results preview: Profit may fall over 50% YoY

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

Kotak Institutional Equities estimates a 55.70 per cent YoY drop in bottom line on 40.10 per cent fall in topline growth.

Reliance Securities projected a 67 per cent hit in consolidated net profit due to a 38.70 per cent drop in sales and 54.70 per cent contraction in Ebitda.


In general, the auto industry witnessed a highly subdued volume performance in fourth quarter of FY20, primarily impacted by nationwide lockdown during the second half of March 2020 and the disruptions led by BS-VI transition.

Volumes declined in high double digits, as BS-IV inventory liquidation restricted wholesale dispatches towards the end of the quarter.

Brokerage Motilal Oswal expects 60.8 per cent YoY fall in net profit for M&M. “The decline in volumes would adversely affect 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 M&M’s earnings are likely to see a sharp decline sequentially, led by a 27 per cent QoQ drop 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 projected a 58.20 per cent YoY and 54.20 QoQ fall in net profit.