Mahindra & Mahindra (M&M) on May 28 reported a 4.5 percent sequential decline in standalone net profit at Rs 1,292 crore for the March quarter.
It rose more than five times or 427 percent from a year ago when profit had taken a hit from an exceptional expense of Rs 753 crore, without which it would have been Rs 998 crore, and the profit in the quarter under review would have risen 17 percent.
Standalone revenues for the Mumbai based automaker rose 12 percent quarter on quarter to Rs 17,124 crore. On a yearly basis, they went higher by 28.4 percent.
“Our performance in the March quarter and FY22 underscores the resilience of our business model. Despite significant challenges due to various factors like Covid, 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 capitalise on growth opportunities,” said Anish Shah, managing director and chief executive officer.
For the full year from April-March 2022, standalone PAT after exceptional item grew 401.5 percent to Rs 4,935 crore from profit after exceptional item of Rs 984 crore in the previous year. Without taking into consideration exceptional items for both the financial years, the profit for FY22 increased 26.4 percent to Rs 5,144 crore from Rs 4,071 crore in the last financial year.
Standalone revenues for FY22 jumped 28.7 percent to Rs 57,446 crore.
Consolidated Numbers
On a consolidated basis, the profit after tax (PAT) bumped 47.8 percent on year to Rs 2,237 crore as compared to a profit of Rs 1,513 crore achieved during the prior year period. On a sequential basis, the growth in profit was 12.6 percent compared to Rs 1,987 crore recorded during the previous quarter.
Consolidated revenue for the quarter rose 21 percent to Rs 25,934 crore on year compared to Rs 21,456 crore registered during the same period last year. The sequential increase in revenue was 10 percent from Rs 23,594 crore of revenue recorded in the previous quarter.
"We recorded our highest revenue for auto and farm segment in FY22”, said Rajesh Jejurikar, Executive Director, while commenting on the results of the company.
“With 170k+ bookings, the demand for the automotive product portfolio remains strong as Farm Equipment Sector (FES) delivered second highest full year PBIT despite market slowdown and steep commodity inflation”, added Jejurikar. Given the recent fiscal and monetary measures by Government of India and RBI, he foresees the cost pressures in the economy to ease out.
Volumes
M&M registered a growth of 43 percent year on year in the automotive sales volume to 1,52,204 units sold during the quarter as compared to 1,06,333 units for the same period last year. The tractor volumes however, slumped 23 percent on year to 72,058 units vis-à-vis 93,044 units sold during the prior year period.
For the full year period, the automotive sales witnessed a growth of 31 percent to 4,55,570 units compared to 3,48,621 unit sold during FY21. The tractor sales growth in FY22 was flat at 3,50,981 units.
The market share for its Farm Equipment Sector (FES) Tractors Market increased by 1.8 percent YoY to 40 percent.
The exports for automotive segment surged 77 percent YoY in FY22 while the exports from FES at 17,500 units jumped 66 percent on year.
The company had more than170K open bookings across its products with 78K bookings open for its recently launched SUV, XUV7OO alone.
Margin
The standalone EBITDA (earnings before interest, tax, depreciation and amortization) margin for the quarter dipped 320 bps on year to 11.4 percent while on a sequential basis, the decline was 40 bps. For the full year the decline in EBITDA margins was more pronounced at 330 bps to 12.3 percent compared to 15.6 percent for FY21.
The standalone net margin (before exceptional item) for the quarter slid 70 bps on year to 6.8 percent but on a sequential basis the decline was 140 bps. For FY22, the net margin was flat compared to last year at 9 percent.
Dividend
The company recommended a dividend of Rs 11.55 per ordinary (equity) share which is 231 percent of Rs 5 face value for the financial year ended March 2022.
The stock closed Rs 23.05 higher at Rs 952.85 on May 27 at National Stock Exchange. It has generated returns of 15 percent over the past one year and is up 2.8 percent during the past one month.