Mahindra & Mahindra reported a 97 per cent year-on-year (YoY) decline in consolidated net profit at Rs 67.79 crore for the June quarter of FY21 (Q1FY21). This included one-time gain of Rs 29 crore. In comparison, the company had reported a profit of Rs 2,259.74 crore in Q1FY20.
The company's revenue also fell 56 per cent YoY to Rs 5,589.43 crore from Rs 12,805.47 crore reported in the year-ago quarter.
M&M sold 27,565 vehicles in Q1FY21, a 78 per cent YoY drop from 1.23 lakh units sold in Q1FY20. Tractor sale also declined 22 per cent YoY to 64,140 units while exports (vehicles and tractors) dropped 72 per cent to 3,109 units from 10,923 in the year-ago quarter.
The company said,"In Q1 F2021, the Indian auto industry (excluding two wheelers) reported a de-growth of 81.5 per cent over the previous year. After the first ever zero sales in the month of April, the industry is finding its way back. The Company's key brands which have a strong rural bias saw good demand in the month of June. However, low pipeline inventory coupled with the challenges of ramping up production due to supply chain issues affected the Company's sales," it said.
M&M's operating margin for the quarter stood at 10.3 per cent as compared to 14 per cent in Q1FY20. Consolidated earnings before interest, tax, depreciation, and ammortisation (Ebitda) fell 68 per cent YoY to 573.1 crore.
"The company continues its strong focus on cost management to improve its financial performance in these testing times. Its timely decision to raise funds along with good cash generation in the quarter has further strengthened the company's cash position," M&M said.
The company approved the appointment of Nisaba Godrej and Muthiah Murugappan as additional directors on the board of directors. The company has also sought shareholders' approval to cut stake in Ssangyong Motor to less than 50 per cent.
The stock slipped 1.3 per cent to Rs 601.50 on the BSE after the announcement of the June quarter result. At 2:05 PM, it was trading 0.9 per cent lower at 604.15 per share as compared to a flat benchmark S&P BES Sensex. A combined 56 lakh shares have changed hands on the counter on the NSE and BSE, so far.