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M&M Q2 Results Review - Galloping To New Heights: Dolat Capital

M&M is in the midst of a very strong model cycle in SUVs and should also benefit from a cyclical strong volume growth in LCVs, 3Ws

<div class="paragraphs"><p>The Mahindra badge is pictured on a steering wheel. (Photo: Unsplash)</p></div>
The Mahindra badge is pictured on a steering wheel. (Photo: Unsplash)

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Dolat Capital Report

Mahindra and Mahindra Ltd. demonstrated a stable performance in Q2. Ebitda grew by 6.6% QoQ with margin at 11.9%. Ebit margin for automotive division increased by 42 basis points QoQ to 6.1 % and for farm equipment segment expanded by 35 bps QoQ to 16.4 %.

Management indicated outstanding bookings of 260,000 plus (including XUV700 at 80,000 and Scorpio-N at 130,000) and mentioned cancellation rate is stable at 5-10%.

M&M remains the leader in SUV revenue market-share at 19%. Automotive margin in FY24 would see sharp jump led by end of introductory pricing of XUV700 and Scorpio-N.

We believe the stock to trade at a premium to historical multiple as the company moves closer to its guided return on equity target of 18%.

Click on the attachment to read the full report:

Dolat Capital Mahindra & Mahindra Q2FY23 Result Update.pdf

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