M&M gains as auto sales recover in June

Mahindra & Mahindra (M&M) rose 1.34% to Rs 517.55 after the company's total sales surged to 19,358 units in June 2020 from 9,560 units sold in May 2020.

However, M&M's total sales have fallen 55% in June compared with 42,547 units sold in June 2019. While total domestic sales declined 53% YoY to 18,505 units, total exports fell 72% YoY 853 units during the month.

Commenting on the performance, Veejay Nakra, chief executive officer, automotive division, M&M, said, The automotive industry has started to see recovery both in the passenger and small commercial vehicle segments. This has been led primarily by rising rural demand and movement of essential goods across the country. Our key brands such as Bolero, Scorpio and Pik-Ups, are all seeing good traction. Managing the supply chain will be our key focus area as we ramp up production to meet this increased demand.

Meanwhile, M&M's total tractor sales during June 2020 were at 36,544 units, up by 10% from 33,094 units for the same period last year. Sequentially, the tractor sales have surged 50.1% in June compared with 24,341 units in May 2020.

Domestic tractor sales rose 12% to 35,844 units while tractor exports contracted 42% to 700 units in June 2020 over June 2019.

Hemant Sikka, President -Farm Equipment Sector, M&M said, "The timely arrival of the south west monsoon, combined benefits of a record Rabi crop, Government support for Agri initiatives and very good progress in the sowing of the Kharif crop have led to positive sentiments among farmers. These underlying factors along with better cash flows in rural markets have helped boost tractor demand during June. It is expected that this demand will continue to remain buoyant in the coming months."

M&M reported a net loss of Rs 3,255 crore in Q4 March 2020 compared with net profit of Rs 969 crore in Q4 March 2019. Revenues fell 35% to Rs 9,005 crore in the March quarter from Rs 13,808 crore reported in the corresponding period last fiscal.

Mahindra & Mahindra's business is diversified across farm equipment, auto and automotive components, real estate, hospitality, information technology, defence and aerospace and financial services.

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