Supply crunch may impact Nov sales: M&M

Automobile major Mahindra & Mahindra came out with strong October sales numbers. Domestic sales shot up 23% to 24,538 units, while exports more than doubled to 882 units. Core utility vehicle sales shot up 30% in October, while the light commercial vehicle segment did even better, improving 37% to 841 units.

Here is a verbatim transcript of the exclusive interview with Rajesh Jejurikar on CNBC-TV18. Also watch the accompanying video.

Q: How has the performance in the utilities portfolio been this time around?  

A: Our UV portfolio has grown very well. We have grown at 32% so we are sustaining the kind of momentum that we had over the last few months. Like we have said through the course of this month, this is being inspite of shortages. So the demand was much stronger than this and most of our products we were struggling to supply. We ended up drying up the pipeline completely. 

Q: Last month you had almost a 23% jump. Is this sustainable? Also, you have your ear close to the ground – what is your year on assessment of consumer demand at this point?

A: Consumer demand is very healthy. Like I said, in October, the biggest challenge in November is supplies. For us, November is going to be tougher because you would have seen in the news that the IOC plant caught fire in Jaipur and one of our key suppliers very close by. So we had a sort of disruption of supply there. So that is going to affect us some bit in November but demand is very healthy even post festival season this time. 

Q: You spoke about that perhaps the supply crunch coming in because of the IOC fire – would you be able to give us a ballpark estimate of what is the kind of impact that you have penciled in?

A: It is too early to say that because it has been a significant event where the armed forces are out they have cordoned off the area. The suppliers themselves have not been able to get in. So it is difficult to access but we are hopeful it will resume in a couple of days – in a few days, couple is not the right word but in few days.

But we do not have a good picture right now. So that is a short-term disruption – that should come back – but the point I was making was that overall because of the strong demand the supply side is under constraint.