Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mahindra & Mahindra Ltd (MAHMF, Financial) reported a 20% growth in profit after tax on a consolidated basis, with a consistent 20% year-to-date growth.
- The Auto segment saw a 16% increase in volume, with SUV market share rising by 200 basis points to 23%.
- Farm business volumes grew by 20%, with market share increasing by 240 basis points to 44.2%, marking the highest ever Q3 market share.
- Mahindra Finance's profit after tax increased by 47%, with assets under management up 19%.
- Tech Mahindra is on a margin recovery path with new deal wins in telecom and green shoots in BFSI and healthcare sectors.
Negative Points
- International Farm business faced challenges due to macroeconomic factors, resulting in lower-than-desired revenue growth of 12%.
- The Auto segment's standalone margin of 9.7% is impacted by the high value of EV contract manufacturing transactions.
- The LCV segment, particularly in the lower tonnage category, has not seen significant recovery, with only low single-digit growth.
- Mahindra & Mahindra Ltd (MAHMF) faced a mark-to-market impact from its investment in KG Mobility, affecting overall profitability.
- The company is cautious about the fast ramp-up of EV production to ensure quality, which may limit initial sales volumes.
Q & A Highlights
Q: What are the learnings from the EV test drives, and are there any areas for improvement in customer or dealer education?
A: Rajesh Jejurikar, Executive Director and CEO of Auto and Farm Sector, explained that the strategy was to create aspirational products that break barriers, such as range anxiety and battery warranty concerns. The positive response has led to an expansion of the initial launch plan to include more cities. The company is conducting charging audits for prospects to ensure readiness at delivery.
Q: How do you expect pricing and costs to evolve for EVs, and where will the PLI benefits be booked?
A: Rajesh Jejurikar stated that the company will work on cost reduction and localization post-launch. Pricing is flexible and will be applicable at the time of delivery. PLI benefits will be booked in the MEAL books.
Q: What is driving the increase in tractor market share, and how are inventory levels?
A: Rajesh Jejurikar attributed the growth to the successful transformation of the Swaraj brand and filling product gaps. The OJA platform has also contributed significantly. Inventory levels have been corrected, and no significant adjustments are expected in the fourth quarter.
Q: How is Mahindra managing the quality and ramp-up of EV production to avoid issues seen by other players?
A: Rajesh Jejurikar emphasized a cautious approach to ramping up production, focusing on quality and validation. The company is operating below capacity to ensure quality is not compromised.
Q: What are Mahindra's plans for software ownership in EVs, and how does it plan to enhance capabilities?
A: Rajesh Jejurikar confirmed that Mahindra owns all critical integration software, including BMS, within MEAL. The company plans to maintain control over essential software components while collaborating with suppliers for specific features.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
