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M&M reported decent Q4 FY23 numbers wherein the topline was reported at ?226 bn, a
growth of 31.8% yoy and 4.2% qoq. Volumes rose by 17% yoy and realizations went up by
about 12.6% yoy. Automotive division revenues came in at ?164 bn, an increase of 36%
yoy led by success of new launches –Thar, Bolero Neo, XUV 7oo, Scorpio variants and XUV
3oo & 4oo as M&M started rapidly catering to the order backlog. Automotive segment
reported strong EBIT margins, which rose by 60 bps qoq, (170 bps yoy) to 7.3% due to
positive operating leverage, model mix and price hikes. Tractor EBIT margins came in strong
at 16.7% which were 10 bps up qoq and 100 bps up yoy. Overall EBITDA margins came in at
13.9% (70 bps jump qoq and 110 bps yoy). Due to low other income reported sequentially,
and an exceptional item, PAT came in just 1.4% up. While adjusted for this one-off item,
adjusted net profit came in at ?20.6 bn which was up 77% yoy and 4.5% down qoq.

Superlative growth in SUVs paves way for bright prospects

M&M witnessed 27% yoy and 7.5% qoq growth in the UV segment volumes during the
quarter. The company has received an excellent response for the new Scorpio N (incl.
Classic) with 117K open bookings since its launch in June. The Thar and XUV 7oo launches
are still having huge order book of 14K and 8K per month respectively, though these models
have long waiting periods. Neo Bolero was launched in July 2021 which already has received
strong order bookings (10K monthly bookings for the entire Bolero family) and has made
robust inroads into Southern markets where the earlier Bolero model was not having a
wide presence. Also XUV3oo and 4oo combined have got a very strong response with 10K
bookings per month. XUV 4oo launched in Jan is now having a demand of 20k units p.m. The
total order bookings (excluding Scorpio N) are 292K currently. With this, the company was
able to increase their SUV revenue market share 19.6% and staying at #1 position. Also the
company plans to launch its EV and ICE variants (4 door and 5 door Thar) in CY 24 along with
several other new products such as BE.05, XUV.e9 and BE-RALL-E for the first time in India.
From existing ICE capacity of 39K p.m, the company plans to expand it upto 49K p.m from
June. M&M plans to launch 5 new SUVs this year.

Also on the CV side, the company is launching the Bolero Maxy Pick-up soon and has plans
to launch several CVs and pick-ups over the next 5 years with a capacity expansion plan
for each of the existing model in place. Also with chip shortage issue getting resolved now,
we believe M&M will be able to cater to this burgeoning demand in FY24 and report solid
growth thereby in line with reduction in waiting period.

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