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M&M Q2 standalone net surges over 8-fold to Rs 1,432 cr; revenue rises 15%

Mahindra and Mahindra said in a statement that with better availability of semiconductors, it expects to maintain volume growth momentum from the third quarter onwards

Mahindra
(Photo: Reuters)
Agencies New Delhi
3 min read Last Updated : Nov 09 2021 | 2:37 PM IST
Homegrown auto major Mahindra & Mahindra (M&M) on Tuesday reported an over eight-fold increase in its standalone profit after tax (PAT) at Rs 1,432 crore for the second quarter ended September 30, 2021, riding on the back of robust sales.

The Mumbai-based company had posted a standalone PAT of Rs 162 crore in the July-September period of previous fiscal.

Mahindra and Mahindra reported the surge in second-quarter profit aided by strong export volumes, while mitigating some impact from the severe global semiconductor shortage that continues to plague the Indian automaker.

The auto industry has seen strong recovery in demand for passenger vehicles in the past two quarters, but with chip shortages hurting carmakers globally companies have scrambled to make up for the production hit.
Revenue for the second quarter rose by 15 per cent to Rs 13,305 crore as against Rs 11,590 crore in the year-ago period, M&M said in a regulatory filing.

The company said it sold 99,334 vehicles during the period under review, up 9 per cent from 91,536 units in the second quarter of last fiscal.

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M&M tractor sales however declined by 5 per cent to 88,920 units in the second quarter as against 93,246 units in the year-ago period.

On a consolidated basis, the Mahindra Group reported a PAT of Rs 1,929 crore as compared with Rs 615 crore in the Q2 of 2020-21. Revenue rose to Rs 21,470 crore in the second quarter as against Rs 19,227 crore in the year-ago period.

"We have seen significant all around improvement in our performance this quarter. Our strong show in the auto and farm sectors was complemented well by the improved performance in the group companies. Our investments in digital platforms are doing well and present a meaningful opportunity to create and unlock value," M&M Managing Director and CEO Anish Shah said.

M&M Executive Director Rajesh Jejurikar stated that the Farm Equipment Sector (FES) continued to deliver robust performance both in terms of market share and financial metrics despite steep commodity inflation.

"We had a blockbuster XUV7OO launch witnessing bookings of more than 70k. The demand for our other key automotive products also remains strong. With better availability of semiconductors, we hope to maintain the volume growth momentum Q3 onwards," he added.

M&M Group Chief Financial Officer Manoj Bhat noted that commodity prices have impacted the margins in both the auto and farm business, but the company's focus on cost management and optimisation has helped mitigate some of the impact.

Mahindra and Mahindra, chaired by billionaire Anand Mahindra, said in a statement that with better availability of semiconductors, it expects to maintain volume growth momentum from the third quarter onwards. Stringent cost control measures at its automotive business have helped Mahindra partially mitigate margin impact of commodity price increase. 

Shares of the company rose as much as 2.6% after results, amid weakness in the broad market which was down 0.19%.

Mahindra said that it faced a production loss of 32,000 vehicles in the second quarter owing to the chip shortage.

However, for the reported quarter, total vehicles sales were up 9%, while total tractor sales were down 5%. The company witnessed strong growth in auto exports as well as farm businesses, with farm equipment exports having the best first half ever.

Due to chip shortages and rising commodity prices, many automakers including Mahindra have focused on manufacturing high margin models and have passed on some of the costs to customers with multiple price hikes.

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Topics :Mahindra & MahindraM&MQ2 resultsautomobile industry

First Published: Nov 09 2021 | 2:03 PM IST

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