Q1 results: M&M’s consolidated net profit jumps more than 5 times
Consolidated net profit at Mahindra and Mahindra (M&M) jumped more than five times in the June quarter from the year-ago period on account of provisioning at its finance arm, Mahindra Financial Services. Additionally, a strong operational performance of the auto business also drove up the earnings.
M&M’s consolidated net profit increased to Rs 2,196 crore from Rs 424 crore, while revenue rose 67 per cent year-on-year to Rs 28,412 crore from Rs 19,172 crore in the June quarter. In the first quarter of FY22, it had made a provision of Rs 2,517 crore. This had impacted the consolidated earnings. It reversed the provisioning in the subsequent quarters as business recovered from the Covid impact.
Meanwhile, the standalone entity saw its net profit surge 67 per cent year-on-year over a robust sale of SUVs, commercial vehicles and tractors. The company expects margins to expand in the coming quarters on the back of a healthy order book for new models, a favourable monsoon and softening of commodity prices, Mahindra officials said at a press meet.
Net profit at the Mumbai-based firm jumped to Rs 1,430 crore from Rs 857 crore in the corresponding period last year, as sales of its passenger vehicles soared to 149,803, up 74 per cent from a year ago, while it has open bookings for more than 273,000 vehicles.
“The semiconductor crisis has largely abated and it is the demand that is driving the higher wait times now. It is truly an unprecedented demand. It’s the quality of vehicles that we have, which is driving demand,” said Anish Shah, group managing director and CEO, Mahindra and Mahindra.
Mahindra said it received more than 100,000 orders within 30 minutes of opening books for its Scorpio-N SUV, worth around Rs 18,000 crore in sales value. It has a capacity to produce around 6,000 of these vehicles a month, Rajesh Jejurikar, executive director, farm equipment and auto sectors, M&M, said at the press meet.
“We have kicked off capacity expansion programmes, but had not anticipated such demand. We are ramping up capacity to make sure we can leverage all the demand we have,” he told reporters, declining to give further details on capacity addition.