Mahindra & Mahindra (M&M) announced a operating profit of Rs 1,183.7 crore in the quarter ended June 2021, down 49% from same quarter last year when India imposed one of the toughest lockdowns in the world to fight the COVID-19 pandemic.
Operating profit also fell 71.8% on a sequential basis, highlighting the impact of the second wave of coronavirus on operations. In the March 2021 quarter, the sports utility vehicle maker posted operating profit of Rs 4,199 crore.
“There were significant headwinds in the first quarter,” Mahindra & Mahindra said in its investor presentation. Its car dealers could only work half the number of days in the quarter, and its farm vehicle dealers only worked three quarters of the quarter, with the second wave impacting the business.
In mid-May, when COVID-19 infections peaked in India, 90 percent of M & M’s car dealerships have been closed. This impacted the company’s sales between April and June 2021, resulting in a drop in total revenue.
The group total income of Rs 19,368 crore in the first quarter of fiscal 2022 contracted 11% sequentially. However, that was 59.2 percent more than total income for the same quarter last year.
“Our agricultural business recorded another exemplary quarterly result, while our automotive business recorded a recovery in demand,” said Anish Shah, Managing Director and CEO of M&M. “Our focus on operational efficiency and financial discipline gives us confidence that our core performance will continue. “
The Mahindra group Automotive revenue of Rs 6,316.8 crore in the June 2021 quarter contracted 25.7% sequentially, but was almost three times the quarterly revenue reported a year ago.
His Farm equipment segment revenue of Rs 7,188.7 crore increased 9% sequentially in the quarter ended June 2021, and was 46.5% higher than a year ago.
Raw material inflation and semiconductor supply issues continue to be of concern, said Rajesh Jejurikar, executive director, automotive and agricultural equipment segments, Mahindra & Mahindra.