M&M Q2 Results Review - Operating Leverage Cushioning Profitability: ICICI Securities
M&M has planned capacity expansion to 39k/49k units per month by Q4 FY23/Q4 FY24 as order backlog continues to be elevated.
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ICICI Securities Report
Mahindra and Mahindra Ltd.’s Q2 FY23 Ebitda margin at 12% (flat QoQ) was inline with consensus estimates. Gross margin was flat QoQ led by promotional pricing of new SUV launches mitigating benefit of raw material price decline.
M&M has planned capacity expansion to 39,000/49,000 units per month by Q4 FY23/Q4 FY24, respectively, as order backlog continues to be elevated at more than 260,000 with brand Scorpio adding 130,000 bookings.
Successful model launches, production ramp up with easing chip-supply situation to drive market share gains further in core SUV segment. Electric vehicle portfolio roll-out to start January 2023 onwards with XUV400, and a pipeline of 17 new products (FY24 onwards) including light commercial vehicles/three-wheelers other than SUVs.
Capex and investment outlook remains unchanged at Rs 65 billion on an average in FY23-24 with frequent asset monetisation programmes driving cash inflow.
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