Mahindra & Mahindra on May 28 reported profit before exceptional item at Rs 1,002 crore in the quarter ended March 2021 against Rs 323 crore in year-ago quarter on the back of improvement in demand for passenger vehicles and tractors.
The net profit after exceptional item stood at Rs 163 crore against a loss of Rs 3,255 crore in the same period last year. The massive loss of Rs 3,255 crore in the quarter ended March 2020 was due to the write down of investment in Ssangyong and other international subsidiaries.
"Capital allocation actions resulted in a significant decline in exceptional losses from Rs 3,578 crore in Q4FY20 to Rs 840 crore in Q4FY21," said Mahindra said in a BSE filing.
This is a combined result of M&M and MVML (manufacturing unit).
Revenue from operations during the quarter grew by 48.1 percent to Rs 13,338 crore compared to the year-ago period, as its automotive business segment sold 1,06,333 vehicles, 18 percent more than the year-ago quarter. The tractors business registered a 58 percent growth selling 93,044 units in the same period.
The company declared a dividend of Rs 8.75 per share for the financial year 2020-21.
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The operating performance also remained strong with EBITDA (earnings before interest, tax, depreciation and amortisation) growing 59.7 percent year-on-year to Rs 1,960.4 crore and margin improving 110 bps YoY to 14.7 percent in Q4FY21 despite a significant strengthening in commodity prices.
Tax expenses for the quarter at Rs 388.8 crore declined significantly from Rs 567.3 crore in Q4FY20.
Automotive business registered a 42.7 percent year-on-year growth in revenue at Rs 7,858.1 crore in Q4FY21. At the operating level, the segment reported a 73.1 percent growth in EBIT at Rs 390 crore with the margin improving 90 bps YoY to 5 percent during the quarter.
"The strong margins and turnaround of global subsidiaries in FES along with a robust automotive demand momentum through the focused SUV strategy has set the ground for us to now accelerate to fly. New products and technologies, farm machinery opportunity, Krishe and cost management sets us up for a bold, aggressive growth trajectory," said Rajesh Jejurikar, Executive Director at M&M.
The farm equipment business revenue grew by 60 percent year-on-year to Rs 4,975.5 crore with its EBIT surging 99.6 percent to Rs 1,095 crore and margin improving 440 bps to 22 percent in Q4FY21.
The farm equipment segment reported strong performance despite supply chain and commodity challenges, said the company, adding subsidiaries in the farm equipment sector registered positive PBIT for the third consecutive quarter with a turnaround in its international operations.
In FY21, profit surged 25 percent to Rs 923 crore but revenue fell 1 percent to Rs 44,574 crore compared to the previous year due to a sharp fall in automotive segment volumes.
The automotive segment registered a 26 percent decline in volumes at 3,48,621 units but tractor sales volumes increased 18 percent to 3,51,431 units compared to the previous year.
"Operating cash generated for FY21 up 119 percent at Rs 10,022 crore, driven by improved profitability and robust working capital management," said M&M.
Mahindra & Mahindra share price was trading at Rs 846.55, up 2.17 percent on the BSE at the time of publishing this copy.