Driving on vehicle price hikes and operating leverage, Indian automaker Mahindra & Mahindra’s profitability is expected to remain strong in Q4. 

The company’s profit after tax could grow 41.9 per cent as compared to the same quarter last year, while the expected revenue share of tractors could come down to 25 per cent in Q4 as opposed to 30 per cent in Q3.

“Lower tractor mix is a prominent margin headwind. M&M’s Auto EBIT margin could come in at 7.3 per cent and the Tractor EBIT margin is seen at 16 per cent. Overall, revenue growth is estimated at 29.6 per cent over the year-ago quarter,” said IIFL Securities.

The overall share of tractors could drop during the quarter.

“M&M’s revenue is expected to de-grow Quarter-on-Quarter, while EBITDA margin is estimated at 12.8 per cent (-23bps QoQ), as the share of tractor volumes declines Quarter-on-Quarter,” said Prabhudas Lilladher.