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Mahindra & Mahindra revenue rises 28% to Rs 17,124 crore but falling tractor sales hurt margin

Automotive major Mahindra & Mahindra (M&M) beat Street’s estimates to post a 28% increase in revenue for the January-March 2022 period, the company’s trading filing showed on Saturday.

However, a decline in tractor volumes hurt the company’s margin, which was 11.4%, down from 14.7% in the same quarter last year.

The automaker’s revenue at Rs 17,124, due to a recovery in demand for its automotive segment, was almost 2% higher than the forecast of Rs 16,795 according to a CNBC-TV analyst poll18 .

M&M’s standalone profit after tax (before exceptional items) for the quarter was Rs 1,167 crore, 8% higher than Street’s estimate of Rs 1,074 crore. PAT (after EI) was recorded at Rs 1,292 crore, representing a whopping 427% year-on-year growth.

The automaker’s earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter under review was Rs 1,945.54 crore, slightly down from Rs 1,955.18 crore for the same period of the financial year previous. EBITDA is in line with analysts’ expectations.

M&M’s total vehicle sales were 1,52,204, compared to 106,333 in the fourth quarter of 2020-2021, while tractor sales fell to 72,058 from 93,044 in the corresponding quarter last fiscal year.

Analysts polled by CNBC-TV18 had predicted auto volumes up 44% to 1,000 units and tractor volumes down 22% to 72,882 units.

Mahindra & Mahindra revenue rises 28% to Rs 17,124 crore but falling tractor sales hurt margin

The automotive segment recorded the highest quarterly revenue ever at Rs 12,072 crore on the back of improved semiconductor supplies during the period January to March 2022, the company said. The agricultural business, meanwhile, delivered the highest volumes on record in FY22 (including Gromax and exports), he added.

M&M Chief Executive, Rajesh Jejurikar, said, “We recorded our highest automotive and agricultural revenue in FY22. M&M became No. SUVs in the fourth quarter and second half of FY22, while FES gained 180 basis points of market share in FY22. With more than 170,000 reservations, demand for the automotive product portfolio stay strong.

Given the recent fiscal and monetary measures taken by the government, the company expects cost pressures in the economy to ease, according to the company’s statement.

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