Mahindra & Mahindra has, for the first time ever, reported net loss of Rs 29.61 crore during the first quarter of fiscal 2000-01, against Rs 34.27 crore during the same quarter last year.
A sharp 34 per cent decline in sales of tractors and a 12.5 per cent drop in utility vehicle sales caused a 19.16 per cent drop in the company's sales for the quarter, which touched Rs 685.86 crore from Rs 848.49 crore during the same period last year.
Volume sales of tractors suffered 34 per cent to touch 12,909 units from 19,000 units a year ago, largely due to a 39 per cent drop in production. Consequently, the company's market share of tractors dropped to around 27 per cent during the quarter. However, K J Davasia, head of M&M's farm equipment division said the company's market share in retail sales was not affected and stood at around 33 per cent.
On the other hand, M&M's utility vehicle sales dropped 12.5 per cent to 13,606 units from 15,557 units in the same quarter last year.
The company's loss before tax was Rs 29.62 crore, after considering an exceptional item charge for VRS of Rs 1.26 crore for the quarter. The company's total outgo towards VRS for over 2,263 employees from both the tractors and automotive division stands at around Rs 140 crore, which is amortised over five years.
Announcing the results at the company's annual general meeting here today, Keshub Mahindra, chairman of M&M said, "We had a very satisfactory response to the VRS announced during the last two months. As of end of June, 848 workers opted for it in the tractors division, while as at end of July, 1415 workers have opted for it in the automotive division. About 35 per cent of the workforce in the automotive division in Mumbai has opted for the VRS."
