Mahindra CIE falls 3% on muted December quarter results

The company said the general cost inflation affecting the business - especially raw materials, energy and logistic costs.

Shares of Mahindra CIE Automotive were down 3 per cent at Rs 193.40 on the BSE in Wednesday’s intra-day trade after the company reported a muted performance for the quarter ended December 2021 (Q4CY21).

On a consolidated basis, the company’s net sales stood at Rs 2,064 crore, down 1.3 per cent quarter-on-quarter (QoQ), up 4 per cent year-on-year (YoY). Earnings before interest tax and depreciation and amortization (EBITDA) margins declined 300 bps QoQ and YoY, due to higher raw material costs. Profit after tax (PAT) more-than-halved QoQ at Rs 80 crore from Rs 166 crore in September quarter (Q3CY21). It was down 29 per cent YoY from Rs 112 crore in Q4CY20.

The company said drop in sales were due to semiconductor shortage. The raw material price increase passed through to customers without margin, with a margin impact of approx. -2 per cent pp over sales. The general cost inflation affecting the business - especially raw materials, energy and logistic costs, the company said. It further said that positive profitability evolution on a difficult market environment (semiconductor shortage, COVID impact, Raw material price increases, energy cost increase and Logistics cost increase).

“PAT for full year basis i.e. CY21 was at Rs 393 crore with EPS at Rs 10.4/share. CFO for CY21 came in robust at around Rs 1,050 crore with FCF also pegged at Rs 500 crore. Negative surprise for the quarter was persistent pressure on gross and consequent EBITDA margins,” ICICI Securities said in a note.