M&M Q1: Record sales, flat profits as costs bite

HDFC Securities is the most bullish on the top line, forecasting revenue to rise 24% to ₹42,253 crore. It too expects profit growth of just 0.2% to ₹3,456 crore, as margin pressure offsets higher sales. HDFC estimates overall EBITDA margin at 12.3%, down 200 basis points year-on-year and 174 basis points sequentially. It expects automotive EBIT margin to soften on higher raw-material costs. The farm-equipment business could also see margins ease because of higher input costs and a greater share of lower-horsepower tractors.

Beyond the headline numbers, the focus shifts to management's outlook for the rest of FY27. M&M's domestic SUV sales rose 15% year-on-year to 174,745 units during the June quarter. Domestic tractor volumes jumped 18% to 152,426 units, well ahead of the company's earlier expectation of mid-single-digit industry growth for the fiscal year.

The Street will watch whether management upgrades its FY27 tractor-industry outlook, provides fresh commentary on SUV demand and order backlog, and shares an update on production capacity, pricing and the margin trajectory of its expanding electric-vehicle portfolio.

The earnings call is also expected to draw questions on the proposed transfer of Mahindra's truck and bus business to SML Mahindra. Analysts believe the focus is likely to remain on the company's core SUV and tractor businesses and whether strong volume momentum can translate into better profitability over the coming quarters.