Margin pressure, revised volume outlook weigh on Mahindra & Mahindra stock

The sharper fall in auto segment margins was on account of higher raw material costs, attractive pricing for new launches, and higher marketing costs

The stock of Mahindra & Mahindra (M&M) was down about 2.6 per cent on margin pressure and a revision in volume outlook for both the auto and tractor segments. While September quarter results were more or less in line with estimates, the company could see pressure on profitability, going ahead.

Even in the quarter gone by, while overall margins were down 150 basis points (bps) to 14.5 per cent, segment margins for auto and tractors slid by 280 bps and 100 bps respectively. The sharper fall in auto segment margins was on account of higher raw material costs, attractive pricing for