 "M&M reports over two-fold increase in Q3 PAT at Rs 1,353 cr")
Homegrown auto major Mahindra & Mahindra (M&M) on Thursday reported over two-fold increase in its standalone profit after tax (PAT) at Rs 1,353 crore, for the quarter ended December 31, 2021.
The Mumbai-based company had posted a standalone PAT of Rs 531 crore in the October-December period of previous fiscal, hit by an impairment provision of Rs 1,210 crore for its bankrupt South Korean subsidiary Ssangyong Motor.
Revenue for the third quarter rose by 8 per cent to Rs 15,239 crore, as against Rs 14,057 crore in the year-ago period, M&M said in a regulatory filing.
The company said it sold 1,18,174 vehicles during the period under review, down 2 per cent from 1,21,133 units in the third quarter of last fiscal.
M&M tractor sales declined by 9 per cent to 91,769 units in the third quarter, as against 1,00,696 units in the year-ago period.
On a consolidated basis, the Mahindra Group reported a PAT of Rs 1,987 crore, as compared to Rs 1,268 crore in the Q3 of 2020-21.
More From This Section
Revenue rose to Rs 23,594 crore in the third quarter, as against Rs 21,626 crore in the year-ago period.
"We have seen improved performance across multiple businesses as reflected in our consolidated performance. Our auto business has done well despite supply-side challenges, while our farm business has shown market share increase despite a slowdown in the market," M&M Managing Director & CEO Anish Shah noted.
In an online press briefing, he added that the company has a number of plans to unlock value across the group.
On electric vehicles (EVs), he noted that the company is already having a strong presence in the three-wheeler segment and feels confident that the automaker would also be able to take a leadership position in the four-wheeler segment.
Asked whether the company is looking at entering the domestic electric two-wheeler segment, he said that currently the auto maker has no such plans to allocate capital for this segment.
The auto major had recently tied up with Hero Electric to collaborate on the EV front.
Elaborating on the auto segment, M&M Executive Director Rajesh Jejurikar said that demand for the company's entire automotive product portfolio remains strong. "The order book for XUV 700 and Thar reflects the customer and market success of these new launches," he said.
The open order book for the model range stood at over 1.55 lakh units, off which 70,000 were for the XUV7OO, Jejurikar said.
"With better availability of semiconductors, we hope to build the volume growth momentum in Q4 FY22 in our journey to being No 1 in core SUVs," he noted.
Jejurikar stated that the company's farm equipment sector (FES) gained 140 basis points market share year-on-year in the third quarter and delivered robust financial metrics despite market slowdown and steep commodity inflation.
He noted that the company was looking at taking a price hike but is yet to calibrate the figure.
"It will be based on commodity price as well as demand momentum... We will take it at an appropriate time... We have not decided on the date yet," Jejurikar stated.
The auto major noted that it has come up with various short and medium-term measures to tackle the issue of semiconductor shortage.
M&M Automotive Division CEO Veejay Nakra said that new sources were identified and the company is also creating reserve stocks of critical electronic components.
Besides, work is also being done to have suitable substitutes for complex multifunction circuits and the automaker is also buying stock from the open market, he said.
Nakra noted that although the situation was improving gradually, it would still take another 6-9 months before normalcy returned, as far as the semiconductor issue was concerned.
"What I can say is that the worst is behind us... Benefits have accrued to us in February from the measures which have been taken already," he said.
The company had to incur a production loss of around 20,000 units in Q3 owing to semiconductor shortage, Nakra said.
M&M CFO Manoj Bhat said the company's focus on capital allocation and profitability has led to a steady increase in Return on equity (RoE) over the last few quarters.
Shares of the company closed 1.49 per cent up at Rs 853.10 apiece on the BSE.