Mahindra & Mahindra’s (M&M) net profit after exceptional items for the second quarter ended September 30, 2021, increased nearly nine times to 1,432 crore on the back of strong performance of the auto and farm divisions, which was supported by a smaller base last year. In the second quarter last year, the company included an exceptional item on account of impairments that led it to report a small profit of 162 crore.
The company’s consolidated revenue from operations increased 14.8% year-on-year to 13,305 crore on the back of improvement in the auto and farm sectors, complemented by the improved performance in group companies. The shortage of semi-conductors impacted the production and sales for another quarter.
Impacted by shortage of semiconductors and rising commodity prices, the earnings before interest tax depreciation and amortisation (Ebitda) declined 19.5% to 1,660 crore during the quarter, while the operating margins declined a sharp 530 basis points.
Anish Shah, managing director & CEO, M&M, said, “We have seen significant allround improvement in our performance this quarter. Our strong show in the auto and farm sectors was complemented well by the improved performance in the group companies. Our investments in digital platforms are doing well and present a meaningful opportunity to create and unlock value.”
The company said that its auto business continued to maintain a strong booking pipeline for its key products. In the farm equipment sector, the tractors market share at 40.1% was up 1.9% compared to the same quarter last year. Farm subsidiaries recorded the fifth consecutive quarter of positive PBIT of over `100 crore. The company also recorded strong exports volumes, with the farm equipment business registering an increase of 105% y-o-y, while the auto segment was up 86% y-o-y.
Rajesh Jejurikar, executive director, M&M, said, “FES continued to deliver robust performance both in terms of market share and financial metrics despite steep commodity inflation. With better availability of semi-conductors, we hope to maintain the volume growth momentum Q3 onwards.”
Manoj Bhat, group chief financial officer, M&M, said, “Commodity prices have impacted our margins in both the auto and farm businesses, but our focus on cost management and optimisation has helped mitigate some of the impact.”
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