Tractor headwinds may offset M&M's strong utility vehicle segment show

Upsides may be limited given the sharp rerating for the stock since March

The stock of automotive (auto) major Mahindra & Mahindra (M&M) was down over 2 per cent in trade on Friday after the billion-dollar global enterprise headquartered in Mumbai posted a muted performance in the April-June quarter (first quarter, or Q1) of 2022-23 (FY23).

While there are multiple positives, especially from an auto-segment perspective, it is offset by demand and margin concerns in the farm equipment/tractor business. This could keep the stock, which has gained 79 per cent from the lows in March, under pressure in the near term.

Although the company reported its highest quarterly revenue for the two segments, revenues, which