M&M drops after announcing sales figures

Mahindra & Mahindra (M&M) fell 5.37% to Rs 346.90 after the company said that sales of vehicles in April was completely impacted by the ongoing Covid-19 pandemic and resulting national lockdown.

M&M announced that the company sold 733 vehicles in the export market during April 2020, as against 2118 units sold in the corresponding period last year, falling 65% on a year-on-year (YoY) basis. Domestic sales of vehicles during the month was completely impacted by the ongoing Covid-19 pandemic and resulting national lockdown. The sales figures for April 2020 were announced on Friday.

M&M's Farm Equipment Sector (FES) recorded total tractor sales (domestic + exports) of 4,772 units during April 2020, registering an 83% YoY decline from 28,552 units sold in the same period last year.

Commenting on the performance, Hemant Sikka, President - Farm Equipment Sector, M&M said the extension of the national lockdown impacted the business, with dealers partially open for just a few days. Going forward, several positive factors including a good Rabi output, opening of procurement centres by the Government, indication of good crop prices, reservoir levels etc., augur well for tractor demand. However, the rate of improvement will depend on how quickly the on-ground sales operations, including the start of NBFCs are normalized, following the relaxation of the lockdown.

M&M's business is currently diversified across farm equipment, auto and automotive components, real estate, hospitality, defence and aerospace and financial services. Further, M&M has significant market share in light commercial vehicle, tractors and UV space.

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