Mahindra and Mahindra Ltd is expected to report 6 percent growth in the auto segment in the fourth quarter, with 14 percent growth in tractors. The company will report its financial results for the March 2019 quarter on Wednesday.

The company has gone through margin pressure in the last several quarters because of reasons like competition, higher discount, and lower market share. The tractor sector margins have fallen for two consecutive quarters, while that of the auto sector have fallen for three consecutive quarters. In the fourth quarter as well, margins are expected to fall.

Overall, the revenue growth would be flat as blended volume has been flat because the auto segment upmove of 6 percent has been offset by a slowdown in the tractor segment. In Q4 the margins are likely to fall by over 300 basis points year on year at 12 percent and profits are expected to fall by almost 26 percent. The volume growth for the company has been tepid despite new launches like Marazzo, Alturas G4 and XUV300.

Here are the key expectations from M&M Q4 Results

Q4FY19 (YoY)

-Revenue seen (GU) at Rs 13,211 crore vs Rs 13,188.8 crore

-EBITDA seen (RD)20% at Rs 1,591 crore vs Rs 1,995 crore

-Operating profit margin seen (RD) at 12 percent vs 15.1 percent

-Profit after tax seen (RD) 26.5 percent at Rs 848 crore vs Rs 1,154.9 crore

-Big issue is margin pressure: Tractor segment margins down for 2 consecutive quarters; Auto segment margins down for 3 consecutive quarters

-Lower demand, increasing competition to impact profitability

-Higher discounting to impact profitability

-Consolidated margins to decline by 310 bps due to weak product mix

-Total volumes weak, (RD)0.4 percent at 2.35 lakh units (YoY); auto volumes (GU) 6 percent offset by weak tractor volumes; tractor volumes (RD)14 percent (YoY)

-New launches like Marazzo, Alturas G4 and XUV300 aided auto segment