Mahindra and Mahindra reported net profit and revenue in the June quarter that exceeded analysts forecasts, driven by its automotive, farm equipment, and financial services businesses.
On a consolidated basis, the group’s net profit was up 60 per cent year-on-year at ₹3,508 crore, while revenue rose 19 per cent at ₹33,892 crore. On a standalone basis, it’s revenue was up 23 per cent at ₹24,368 crore, while net profit nearly doubled to ₹2,774 crore. Operating profit was 46 per cent higher at ₹46 per cent.
It’s revenue market share in the SUV segment was up 310 basis points to 20.2 per cent, while in the tractor segment, its market share rose 20 basis points to 42.9 per cent in the quarter.
The automotive segment revenue rose 27 per cent year-on-year to ₹17,000 crore, while the tractor segment saw a slight dip in revenue to ₹9,710 crore in the June quarter.
Cash generation
Anish Shah, MD and CEO, said that the net cash generated between FY22 and the end of Q1FY24 was ₹13, 842 crore, with the auto sector generating cash of over ₹4,000 crore and the tractor segment nearly ₹4,600 crore. He made it clear that cash flows from one business would not be used for any other business.
He said that the group followed a strict capital allocation policy and was maintaining discipline in that respect. On Thursday, the company announced an investment of ₹1,200 crore by Temasek in its EV arm, valuing the vertical at over ₹80,500 crore compared to the ₹70,000 crore valuation at which the BII investment had happened earlier.
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Commenting on the investments, Shah said that both investors were strong partners who are expected to bring a lot of value to the EV mobility business. The investments by the two companies will be done in tranches, as the company will also be pumping in its own funds into the business.
He added that they could look at a third marque investor, but that would be at a later stage when the current capital allocation was done. The company plans to launch five EVs over the next three years.