SUV and tractor specialist Mahindra & Mahindra is expecting a drop of 15-20 percent in sales in the June quarter hit by the rampant spread of the second wave of COVID-19 and lockdowns enforced in various states.
“The revenue and profitability will be impacted in line with the fall in volumes. However, the company is taking various cost optimisation measures to limit the adverse impact,” M&M said in a late evening filing with the stock exchanges.
Earlier in May, M&M preponed the scheduled maintenance shutdown of four working days, in each of its automotive division manufacturing plants, in a staggered manner. This was originally scheduled for June 2021.
“With the rampant spread of the second wave of COVID-19 and lockdowns enforced in various parts of the country coupled with disruption in the supply of oxygen for industrial use, demand and supply for vehicles and tractors is expected to be impacted temporarily,” M&M stated in a release.
The Mumbai-based company is also struggling with procurement of micro-processors (semiconductors) used in electronic control units fitted in different components unlike M&M’s competitors like Maruti Suzuki, Tata Motors and Hyundai who have not faced a shortage of similar scale.