With 273k+ bookings, the demand for the automotive product portfolio remains strong, the company said in a press meet.
Mahindra & Mahindra delivered its the highest ever quarterly sales volumes with 74 percent growth selling 1,49,803 vehicles in the quarter under review, as compared to 85,858 vehicles in the year-ago period,
The farm-to-SUV automaker clocked 75,500 units for its SUVs and 46,000 units for its pik-ups claiming an overall higher operating profit margin of 11.9 percent. M&M also posted the highest ever quarterly standalone revenue for Auto and Farm Segments during Q1 at Rs 18,995 crores. Consolidated revenues from operations increased to Rs 28,412.38 crore in the first quarter of this fiscal, as compared to Rs 19,171.91 crore in the corresponding period a year ago. The automotive segment contributed Rs 12,741 crore as against Rs 6,317 crore in the year-earlier quarter.
M&M’s standalone profit jumped by 67 percent to Rs 1,430 crores after taking into consideration extraordinary items, as compared to Rs 855 crore year-on-year backed by a strong momentum of all-around growth across business verticals whereas consolidated profit after tax stood at Rs 2,360.70 crore in the first quarter ended June 30. M&M had posted a consolidated loss after tax of Rs 331.74 crore in the year-ago period, the company said in a regulatory filing.
Its Farm Equipment Sector (FES) market share for Q1 FY23 increased by 42.7 percent which is an uptick of 0.9 percent YoY. For the year-on-year period, the farm equipment vertical increased its market share by 0.9 percent a year pegging a total revenue of Rs 8,427.66 crore in the current quarter, as compared to Rs 7,188.74 crore in the previous quarter. Tractor sales showed a strong growth of 18 percent of 1,17,413 sold units in the quarter under review, from 99,127 units in the same period a year ago.
On the Scorpio-N launched just over a month ago, Rajesh Jejurikar, Executive Director, Farm & Auto said the company feels the pain of the customers on the long waiting periods. However, due to limitations from suppliers, it would only be able to ship out 20,000 units by December with a monthly production capacity of 6000 units.
On the prospects of discontinuing the Marazzo which seems to have lost the way, Jejurikar admitted that the company would pay "more attention to the brand once they are finished meeting existing challenges". He however acknowledged that there are "no plans to discontinue the brand that still enjoys its niche in certain segments"
On the robust performance of the farm equipment business, he stated the firm has recorded its highest quarterly revenue for Auto and Farm segments and delivered a robust operational and financial performance in Q1 FY23.
"M&M continues to maintain its no.1 position in SUV revenue marketshare while FES strengthened its leadership position with 42.7 percent tractor marketshare. With 273k+ bookings, the demand for the automotive product portfolio remains strong. Following the blockbuster launch of Scorpio-N, we are excited about the Born Electric Vision later this month," Jejurikar stated.
Reflecting on the semiconductor challenges Aneesh Shah, Managing Director & CEO at Mahindra Group said the "semiconductor crisis is much behind us, however, the challenge remains to meet the demand and evaluate how to meet the current order book”. The company has diversified its sourcing of chips, he added.
Mitul Shah Head of Research at Reliance securities sharing his view on the results said that he expects M&M to face some volume pressure owing to semiconductor and component restriction issues in the near term. "Despite near-term challenges due to component supply issue, we expect domestic PV industry to recover in FY23E with a strong bounce back in the second quarter of the current year which would support MM’s business. Moreover, we expect the tractor industry to keep cushioning overall profitability and the industry would recover in FY24," he said
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