Mahindra and Mahindra on June 12 has posted a massive loss of Rs 3,255 crore in the quarter ended March 2020 due to the write down of investment in Ssangyong and other international subsidiaries.
Profit in the year-ago quarter was Rs 969.2 crore.
The profit before one-time loss stood at Rs 890 crore for the March quarter against profit of Rs 1,515 crore in the same period last year, said the automobile company in its BSE filing.
"PAT after exceptional item was primarily impacted due to write down of investment in Ssangyong and some other international subsidiaries," said the company.
As announced earlier Mahindra Board had decided not to infuse any fresh capital into Ssangyong and is re-examining the business outlook of other International subsidiaries, in view of the current environment, to decide on future capital allocation, it added.
Revenue from operations declined 34.8 percent year-on-year, which was ahead of Street estimates, to Rs 9,005 crore in Q4FY20.
The stock reacted positively to earnings scorecard as it was trading at Rs 488, up 2.86 percent on the BSE at the time of publishing this copy.
Passenger and commercial vehicles, and three-wheeler sales together declined 47 percent year-on-year to 86,351 units in Q4FY20. "This decline was driven by the continued slowdown in economy, the transition to BSVI from 1st April 2020 and concerns over the COVID-19 outbreak and ensuing lockdown for seven days in March 2020," said M&M.
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The farm equipment segment registered a half a percent YoY growth in volumes at 57,164 tractors during the quarter. Company said good Rabi outlook, increased government spend in rural, along with better liquidity conditions in the market led to improved sentiments in agri and rural economy, though the industry was adversely impacted in March because of the nationwide lockdown due to COVID-19 outbreak.
M&M said it increased its market share in the domestic tractor market to 39.1 percent in Q4FY20, a growth of 3.7 percent over corresponding quarter previous year and continued to maintain its operating margin.
Automotive segment registered a 46.1 percent YoY decline in revenue at Rs 5,506 crore and 75 percent fall in EBIT at Rs 225.3 crore, while tractor business showed a 3 percent drop in revenue at Rs 3,111 crore.
Tractor segment at operating level showed 5.8 percent YoY growth in EBIT at Rs 549 crore and 140 bps rise in margin at 17.6 percent for the quarter.
At operating level, company's earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 34.3 percent to Rs 1,227.4 crore, but margin expanded 10 bps to 13.6 percent in Q4.
Numbers, barring net level, beat analysts expectations. Revenue was estimated at Rs 8,606 crore and EBITDA was expected at Rs 956 crore with margin at 11 percent for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.
In FY20, company's profit declined 86 percent to Rs 740 crore and revenue fell 15 percent to Rs 44,866 crore compared to previous year, while margin remained unchanged at 14.2 percent.
Meanwhile, M&M enhanced the limit of raising funds by way of issuance of securities from the existing limit of Rs 5,000 crore to Rs 7,500 crore.