Mahindra expects global business losses to shrink with Ssangyong exit

Mahindra reported a slump in quarterly profit earlier on Friday, booking a one-time loss of 12.1 billion rupees ($166 million) related to South Korean unit Ssangyong.
By : Reuters
| Updated on: 06 Feb 2021, 12:02 PM
Representational File Photo: The logo of Mahindra and Mahindra is seen on a car at a showroom in Mumbai, India, August 30, 2016. REUTERS/Danish Siddiqui (REUTERS)
Representational File Photo: The logo of Mahindra and Mahindra is seen on a car at a showroom in Mumbai, India, August 30, 2016. REUTERS/Danish Siddiqui (REUTERS)
Representational File Photo: The logo of Mahindra and Mahindra is seen on a car at a showroom in Mumbai, India, August 30, 2016. REUTERS/Danish Siddiqui (REUTERS)
Representational File Photo: The logo of Mahindra and Mahindra is seen on a car at a showroom in Mumbai, India, August 30, 2016. REUTERS/Danish Siddiqui

Indian automaker Mahindra & Mahindra Ltd expects losses from international subsidiaries to plunge by 90% with the disposal of Ssangyong Motor as a year-long business review nears conclusion, a company executive said.

Mahindra reported a slump in quarterly profit earlier on Friday, booking a one-time loss of 12.1 billion rupees ($166 million) related to South Korean unit Ssangyong, which filed for a pre-packaged rehabilitation bankruptcy plan in December.

Similar Cars

Find More Cars
Mahindra Kuv100 Nxt (HT Auto photo)
Mahindra Kuv100 Nxt
1198 cc | Petrol | Manual
₹5.66 - 8.13 Lakhs**Ex-showroom price
Mahindra E20 Nxt (HT Auto photo)
UPCOMING
Mahindra E20 Nxt
 
₹6 - 8 Lakhs* *Expected Price
Mahindra E2o-plus (HT Auto photo)
Mahindra E2o-plus
Electric | Automatic
₹7.34 - 9.57 Lakhs**Ex-showroom price
Mahindra Xuv300 (HT Auto photo)
Mahindra Xuv300
1197 cc | Petrol | Manual | 17 kmpl
₹7.96 - 13.46 Lakhs**Ex-showroom price
Mahindra Ekuv100 (HT Auto photo)
UPCOMING
Mahindra Ekuv100
 
₹8.25 - 10 Lakhs* *Expected Price
Mahindra Bolero Neo (HT Auto photo)
Mahindra Bolero Neo
1493 cc | Diesel | Manual | 17.29 kmpl
₹8.48 - 10.99 Lakhs**Ex-showroom price

(Also Read: Mahindra Thar’s automatic variants clock nearly half of its sales)

"Ssangyong will now become a discontinued operation as it filed for bankruptcy," said Mahindra's deputy managing director Anish Shah, who will take over as managing director from April.

FOLLOW US:Stay Updated with latest content - Subscribe us on
FOLLOW US:Stay Updated with latest content - Subscribe us on

As part of a wider review to retain only those businesses with the potential to make money, Mahindra has been in talks to sell its stake in Ssangyong. It also ended its joint venture with Ford Motor Co and cut more than half of its North American workforce.

Losses from the international subsidiaries are expected to shrink to about $41 million in the fiscal year starting April 1 from an expected loss of $411 million in the current year.

"Our capital allocation actions are almost complete ... We're now really starting to focus on how can we drive significant growth," said Shah, adding the company plans to invest in electric vehicles and strengthening its portfolio of sport-utility vehicles (SUVs) in the domestic market.

Third-quarter profit after tax on a standalone basis slumped 90% to 309.3 million rupees for the Oct-Dec period, compared with 3.07 billion rupees a year earlier, Mahindra said, even as revenues rose 15%.

(Also Read: 2021 Mahindra XUV300 launched with AutoSHIFT transmission, connected car tech)

However, the results in combination with those of its manufacturing unit translate to a profit after tax of 5.31 billion rupees for the third quarter, a 40% jump from the same quarter a year earlier. The combined operating profit margin for the quarter was 17% versus 14.8% a year ago.


First Published Date: 06 Feb 2021, 12:02 PM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city