Mahindra registers profit of ₹424 crores for first quarter of this year
Mahindra & Mahindra on Friday reported a consolidated profit after tax (PAT) from continuing operations at ₹424 crore for the first quarter ended June 2021. The Mumbai-based company had a net loss of ₹49 crore during the April-June period of FY2020-21 due to massive disruptions amid the coronavirus pandemic.
Consolidated revenues of the company stood at ₹19,172 crore in the first quarter as compared with ₹11,969 crore in the same period last year. On a standalone basis, the company's PAT stood at ₹856 crore as compared with ₹68 crore in the first quarter of 2020-21, Mahindra & Mahindra (M&M) said in a statement. Standalone revenues rose to ₹11,763 crore during the period as compared with 5,589 crore in the June quarter of 2020-21. The company's net loss after tax from continuing and discontinued operations stood at ₹331.74 crore in the first quarter ended June 2021, albeit its farm equipment and auto sector putting up strong performance.
The company had posted a consolidated net profit after tax from continuing and discontinued operations at ₹54.64 crore in the first quarter last fiscal, M&M reported in a regulatory filing. Consolidated revenue from operations stood at ₹19,171.91 crore as against ₹11,969.04 crore in the same period last fiscal, it added. M&M said it has ceased consolidating Ssangyong Motor Co (SYMC) as a subsidiary from December 28, 2020 and has classified it as discontinued operations for all periods presented. SYMC has applied to the Bankruptcy Court in South Korea for rehabilitation proceedings and has been admitted in the Autonomous Rehabilitation Support (ARS) programme.
There were significant headwinds in the first quarter, "but despite those, we've seen a very strong performance in our farm business, a good recovery in auto", M&M Ltd Managing Director and CEO Anish Shah said in a virtual earnings call. He said the company's focus on operational efficiency and financial discipline gives it the confidence that its core performance will continue. During the quarter, he said commodity price inflation has been a big factor along with the supply chain issues with regard to semiconductor shortage.
Shah noted that the company is aiming for leadership in the auto sector and in that regard it plans to launch 23 products, including SUVs, electric vehicles and commercial vehicles, by 2026. On semiconductor shortage issue, M&M Executive Director Rajesh Jejurikar said they were keeping a close watch on the situation. "Regarding semiconductors, it is a very dynamic situation which needs to be watched very closely.. the news is not very good..production happens in countries like Malaysia ..they are going through a very serious COVID wave which is affecting production and it is very uncertain. We cannot assume that the semiconductor issue is behind us," he noted.
He said the company would try its best in order to meet the market requirements. "But one thing is sure that the festive season is going to be tough for the entire industry," Jejurikar noted. He added that the company will take an actual call on announcing the start of deliveries of XUV700 only after looking at the supply of semiconductors.
When asked if the company is also looking at production cuts due to the chip shortage, he Jejurikar said the company is evaluating and nothing has been finalised yet. On a query regarding taking a price hike, he noted that the company has already increased prices with effect from July in order to offset the impact of rising commodity prices. When asked if the cut in duties on electric cars would help the electric vehicle segment, as has been demanded by the US firm Tesla, Shah stated: " Any cut in duties will help markets, there is a lot which can done on the GST side as well and our sense is that government is moving prudently and we will see a set of policies which will make sense for the overall EV segment."
During the quarter, the company said the automotive segment had a revenue of ₹6,050 crore, while the farm equipment segment clocked revenue of ₹5,319 crore. The company said it sold 85,858 vehicles in the first quarter, up from 29,619 units in the year-ago period. Total tractor sales stood at 99,127 units in the first quarter as against 65,195 units in the same period last fiscal, it added. Jejurikar said the company has embarked on the "journey of bold, aggressive growth with a good start in Q1 FY2022".
While the farm equipment segment continued to deliver robust performance both in terms of market share and financial metrics, the demand for key automotive products also remains strong, he added. With the upcoming launch of XUV700, Jejurikar said the company plans "to ride on the festive season with strong volume growth aided by rebound in Indian economy". However, he said, "Commodity inflation and semiconductor supply issues continue to be of concern."