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Worst of supply constraints behind us, expect strong growth, says M&M's Rajesh Jejurikar

In its results today, M&M said it has recorded the highest ever standalone revenue for auto and farm segments at Rs 55,300 crore for FY22 — up by 29 percent

May 30, 2022 / 09:08 PM IST
Rajesh Jejurikar, Executive Director of Mahindra & Mahindra (Image Source: M&M)

Rajesh Jejurikar, Executive Director of Mahindra & Mahindra (Image Source: M&M)

The revenue market share for sports utility vehicles (SUVs) is “back to the top position”, Mahindra & Mahindra (M&M) executive director Rajesh Jejurikar told CNBC-TV18. He added that the company is “getting 9,000-10,000 bookings every month for the XUV 700”.

Speaking to the channel on May 30, Jejurikar also sought to dismiss speculation, stating that M&M “has no plans to undertake any restructuring”.

On the overall market situation, he said that some risks remain on the external environment front and supply has been disrupted due to lockdowns in China. He, however, added that they expect to see “strong growth” in the auto business in FY23 and that “the worst of supply constraints are behind us”.

On the long wait periods for customers, Jejurikar said, “We are not happy that our models are having 18-24 month waiting periods in our models. As we ramp up capacity and the semiconductor crisis abates, the waiting period will be brought down.”

Farm sector makes big gains

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“This is the third highest quarter profit for tractors -- April traction in tractors is strong, better than expectations,” he noted. In results today, M&M said it has recorded the highest ever standalone revenue for auto and farm segments at Rs 55,300 crore for FY22 — up by 29 percent.

The farm equipment sector (FES) tractors market share for FY22 is at 40 percent, up 1.8 percent year on year. M&M also recorded its highest ever farm export volume of 17,500 tractors in FY22, up 66 percent.

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Further, the company’s farm subsidiaries posted their highest ever revenue and PBIT in FY22.

Performance

Shares of Mahindra & Mahindra (M&M) gained as much as 3.65 percent to Rs 988 on May 30. The company touched a new 52-week high and also gained the top spot in revenue market share of the SUV segment.

The company’s auto business also delivered its highest ever quarterly UV Volumes in Q4 with 42 percent growth year-on-year (YoY).

“Our performance in Q4 and FY22 underscores the resilience of our business model. Despite significant challenges due to various factors like COVID-19, Commodity prices, semiconductor shortages and the Ukraine conflict, we have delivered strong results at the consolidated level. All of our group companies are well positioned to capitalize on growth opportunities,” said Anish Shah, MD and CEO, M&M.

M&M saw a “strong” auto export performance in FY22 with 77 percent growth YoY. The standalone PAT after El in Q4FY22 is at Rs 1,292 crore. This is up 427 percent YoY; while that for FY22 at Rs 4,935 crore, up 401 percent YoY.

M&M also took the first spot in terms of electric three-wheelers in FY22, registering a market share of 73.4 percent.

The company announced a dividend of Rs 11.55 per share, 231 percent of face value, for FY22.

M&M’s Group Chief Financial Officer Manoj Bhat reiterated the company’s goal to reach 18 percent return on equity (RoE), adding that their “focus on capital allocation and improved financial metrics continues to deliver results”.

On the broader market, Reuters reported that M&M led a 1 percent jump in Indian shares after reporting positive Q4 results. The market also benefitted as global mood improved after China eased some COVID-19 curbs in Shanghai.

Watch Rajesh Jejurikar’s full interview with CNBC-Tv18 here:

Jocelyn Fernandes
first published: May 30, 2022 01:54 pm
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