Mahindra & Mahindra (M&M) 2QFY2015 results were in line with our estimates primarily on account of higher other income and lower taxation even as the operating  performance lagged estimates. Revenues grew 6% yoy to Rs 91.78 billion. Volumes remained flat on yoy basis.

However, Realisation, vehicle grew 5% yoy driven by better product mix and price hikes which boosted the overall revenues. On the operating front, M&M disappointed reporting EBIDTA margins of 12% which is below our estimate of 14.1%. Sharp increase in the other expenditure impacted the margins.

Commenting on the result, Bharat Gianani, research analyst, automobile, Angel Broking, said, ''However, higher other income at Rs 4.90 billion (35% yoy growth) and lower taxation boosted profitability. Net Profit at Rs 9.74 billion declined 5% yoy but was in line with our estimate of Rs 9.65 billion. Going ahead, we would await management commentary on margin outlook and demand environment. Currently we have Buy rating on the stock with price target of Rs 1,524.''

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