M&M's operating profit declines by 49 percent
Anish Shah, CEO of Mahindra & Mahindra, said its farm business had another exemplary quarter, while the auto business showed demand recovery.
Mahindra & Mahindra (M&M) reported a consolidated operating profit of Rs 1,183.7 crore in the quarter-ended June 2021, down 49 percent compared to the same quarter last year when India imposed one of the strictest lockdowns in the world to tackle the COVID-19 pandemic.
The operating profit was also 71.8 percent lower on a sequential basis, underlining the impact of the second coronavirus wave on operations. In the March 2021 quarter, the sports-utility vehicle manufacturer posted an operating profit of Rs 4,199 crore.
“There were significant headwinds in the first quarter,” said Mahindra & Mahindra in its investor presentation. Its auto dealers could work only half the number of days in the quarter, and its farm vehicle dealers worked for only three-fourth of the quarter, as the second wave impacted the company.
In mid-May, when COVID-19 infections peaked in India, 90 percent of M&M's auto dealerships were closed. It impacted the company’s sales between April and June 2021, resulting in a drop in total income.
The group’s total income of Rs 19,368 crore in the first quarter of fiscal year 2022 contracted 11 percent sequentially. However, it was 59.2 percent more than the total income in the same quarter last year.
“Our farm business delivered yet another exemplary quarter result, while our auto business showed demand recovery,” said Anish Shah, Managing Director and CEO of M&M. “Our focus on operational efficiency and financial discipline gives us the confidence that our core performance will continue.”
The Mahindra Group's automotive revenue of Rs 6,316.8 crore in the June 2021 quarter contracted 25.7 percent sequentially, but was almost three times the quarterly-revenue reported a year ago.
Its farm equipment segment revenue of Rs 7,188.7 crore grew 9 percent sequentially in the quarter ended June 2021, and was 46.5 percent higher than a year ago.
Commodity inflation and semiconductor supply issues continue to be a matter of concern, said Rajesh Jejurikar, Executive Director, Auto and Farm Equipment segments, Mahindra & Mahindra.
Edited by Kunal Talgeri
