Now Reading: M&M auto segment set for gains despite Q1 margin miss
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M&M auto segment set for gains despite Q1 margin miss
Mahindra & Mahindra's Q1FY27 operating profit missed estimates as gross margins fell, yet the auto segment is poised for near-term gains, rediff.com reports. Revenue rose 23 per cent year-on-year, with auto revenue…
The Story in Brief
Mahindra & Mahindra's Q1FY27 operating profit missed estimates as gross margins fell, yet the auto segment is poised for near-term gains, rediff.com reports. Revenue rose 23 per cent year-on-year, with auto revenue up 24 per cent on an 18 per cent volume increase. SUV market share reached 25 per cent, up 50 basis points, and electric SUVs made up 12 per cent of volumes.
The company is adding 10,000 ICE and 4,000 BEV units in H2FY27, planning to double utility vehicle capacity to 132,000 units a month by FY31. Brokerages remain bullish: Emkay retained a 'buy' with a target of Rs 4,100, while CLSA upgraded to 'outperform' with a Rs 4,588 target, citing SUV demand and a resilient tractor outlook.
The Indian Opinion
The Q1 margin miss is being treated as a footnote, and the surge in M&M's stock shows investors are buying the capacity story, not the current numbers. But the 210 bps margin contraction is real, and commodity inflation plus hedging losses could persist. The test is whether auto margins can hold above 7 per cent even as price hikes face competition. Watch the H2FY27 margin print: if it stays below 8 per cent, the bull case loses its engine.
Source: rediff.com
This story was synthesised by AI from the source linked above.
