Auto major Mahindra and Mahindra (M&M) is expected to report robust earnings in the third quarter of the financial year 2022-23 (Q3FY23) on Friday, February 10, 2023.

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According to Zee Business research, M&M is likely to report a 36.7 per cent rise in net profit to Rs 1,850 crore for the quarter ended December 2022 compared to the same quarter of the previous fiscal, mainly on the higher volumes and revenue growth during the quarter.

The analysts estimate the revenue of auto heavyweight — led by billionaire Anand Mahindra — to grow 41.4 per cent year-on-year to Rs 21,550 crore in the December quarter of FY23.

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The earnings before interest, taxes, depreciation, and amortization (EBITDA) of M&M seen growing 51.2 per cent YoY to Rs 2,730 crore in the December quarter of FY23 as per Zee Business research. The operating profit (EBITDA) is benefited from lower input costs.

M&M’s margin — a key measure of profitability for businesses — is estimated to grow by 80 basis points (bps) at 12.7 per cent for the third quarter of the current financial year against 11.9 per cent in the corresponding quarter of the last fiscal.

Zee Business expects M&M to show strong recovery in both auto and tractor volumes on improving semiconductor supply and demand. the volume of M&M was up 31.6 per cent to 2,81,859 units YoY, the analysts noted.

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Similarly, Kotak Institutional Equities estimate that the overall EBITDA margin to improve by 70 bps sequentially led by superior segmental mix and raw material tailwinds. The brokerage maintained a ‘buy’ rating on the stock with a smaller target price of Rs 1,435 apiece, implying a 4 per cent upside.

M&M share price has jumped more than 63 per cent in the last one-year period as compared to a five per cent rise in the S&P BSE Sensex. While it has reported a growth of eight per cent in the previous six months against more than a three per cent rise in the benchmark indices.