M&M Q2: Market experts advise buy as operating performance strong

Auto major Mahindra and Mahindra’s (M&M) second-quarter net profit was impacted by a one-time write-off of Rs 1,149 crore towards impairments. However, the operating performance was better than what most analysts were expecting.

Bharat Gianani, Sr. Research Analyst at Sharekhan told CNBC-TV18, “The numbers on the operating front are definitely better than expectations. The street was expecting a consolidated margin of M&M + Mahindra Vehicle Manufacturers Limited (MVML) of 14.5 percent but it has come in at about 17.7 percent. There is beat as far as the operating performance is concerned. Tractor, it is almost a record margin at 24.3 percent.”

He further said, “Despite double-digit volume drop there has been an improvement in the EBIT margins for the auto business, so that is kind of commendable performance from M&M on the operating side.”