Driven by strong automobile sales, Mahindra and Mahindra reported a 35 per cent rise in consolidated net profit at ₹3,170 crore for the quarter that ended in September against ₹2,347 crore reported during the same quarter last year. This, however, is a 3.41 per cent (₹3,282 crore) dip from the June quarter.
Revenue from operations of the company saw an uptick of 1.83 per cent, to ₹37,689 crore in the September quarter, compared to ₹37,010 crore reported in the year-ago period. Revenue also saw a 1.83 per cent increase at ₹37,010 crore.
“Our businesses have delivered a solid operating performance this quarter. Auto and Farm continued to strengthen market leadership by gaining market share and expanding margins. MMFSL GS3 remained under 4 per cent (at 3.8 per cent) and end losses have improved structurally. TechM delivered a good quarter and the long-term focus remains on reverting to past profitability. Our growth gems are progressing well on the 5x challenge,” said Anish Shah, Managing Director & CEO of M&M.
Auto vertical
In the auto vertical, SUV volume was up 18 per cent with a market share of 21.9 per cent. In the farm segment, the domestic industry witnessed a 4 per cent increase in volume with a 42.5 per cent market share.
The electric vehicle penetration was at XXX per cent.
The company’s current passenger vehicle capacity is at 54,000 units. It has stated that it would add 9,500 units of Thar Roxx, which presently has a waiting period of up to 15 months.
Further, the company stated that sales driven by the festive season has reduced passenger vehicle inventory level to less than 30 days.
Tractor biz flourishes
“In Q2 FY25, we gained market share across both our auto and tractor businesses. SUV volumes increased 18 per cent year-on-year, maintaining leadership in revenue market share, with an increase of 190 bps y-o-y on the back of two successful launches. Volume market share for LCVs <3.5T stands at 52.3 per cent, a rise of 260 bps y-o-y. The auto standalone EBIT margin was 9.5 per cent, a gain of 140 bps y-o-o (excluding PY gain on LMM transfer). In our tractor business, we achieved our highest-ever Q2 market share at 42.5 per cent, with standalone margins up by 150 bps year-on-year, said Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector) of M&M Ltd.
The company has changed its outlook for tractors for H2 and has stated that the industry is expected to grow between 13 to 15 per cent.
“We are seeing a good revival of the rural markets and economy with rainfall reservoir level going up,” said Jejurikar.
In the international market for farm equipment and machinery, Mahindra & Mahindra stated that it will be evaluating its international operations in the present quarter.
“The US market has witnessed a significant decline in the tractor segment in two to three years. Inflation is very high in Turkey,” added Anish Shah.