M&M Q3 PAT down 22% YoY to Rs 1,353 crore

Mahindra & Mahindra (M&M) reported 22% fall in standalone net profit before exceptional items to Rs 1,353 crore in Q3 FY22 as compared with Rs 1,745 crore in Q3 FY21.

Revenue rose by 8% YoY to Rs 15,239 crore during the quarter.

EBITDA declined by 24% to Rs 1,806 crore in Q3 FY22 from Rs 2,386 crore in Q3 FY21.

The company sold 1,18,174 vehicles in Q3 FY22, which is lower by 2% as against 1,21,133 vehicles sold in the same period last year. Tractor sales in Q3 FY22 amounted to 91,769 units (down 9% YoY).

M&M said that commodity inflation, shortage of semi-conductors impacted operating margin which stood at 11.9%. The company recorded continued growth in exports both for Auto and Farm divisions. It registered improved group company performances at Mahindra Finance and Mahindra Lifespaces.

With regard to its Automotive division, the company said that the booking pipeline remained healthy and the demand for its product remained buoyant. Stringent cost control measures have helped to partially mitigate margin impact of commodity inflation. Global shortage of semi-conductors / ECUs impacted production and sales for yet another quarter. However, supplies improved over Q2 FY22, reflecting in higher volumes in Q3 FY22 QoQ.

The Farm Equipment division recorded growth of 14% in Q3 market share for M&M.

On a consolidated basis, M&M's net profit before exceptional items from continuing operations rose 28% to Rs 1,798 crore on a 9% increase in revenue to Rs 23,594 crore in Q3 FY22 over Q3 FY21.

Dr. Anish Shah, managing director & CEO, M&M, said, We have seen improved performance across multiple businesses as reflected in our consolidated performance. Our Auto business has done well despite supply side challenges while our Farm business has shown market share increase despite a slowdown in the market.

Manoj Bhat, Group chief financial officer, M&M, said, Our focus on capital allocation and profitability has led to a steady increase in RoE over the last few quarters."

The board of M&M today approved sale/transfer of freehold land admeasuring approximately 9.24 acres situated at Kandivali (East), Mumbai, on which no operations of the company are being carried out, to Mahindra Lifespace Developers (MLDL), a listed subsidiary of the company or to any of the subsidiaries or affiliates of MLDL.

As no operations of the Auto and Farm Sector of the Company (AFS) are carried out on the land being sold, the sale of the said land will not have any impact on the operations of AFS carried out at Kandivali, Mumbai, which will continue as hitherto, the company said.

The company expects to complete the sale/transfer by 30 September 2022 (sale date) unless mutually extended by both parties. The actual date of completion will depend upon the receipt of requisite approvals from the statutory authorities.

M&M will receive an aggregate consideration of Rs 365 crore in tranches and interest @ 7% p.a. receivable during the interim period of payment on unpaid principal balance from the sale date.

Mahindra Lifespace Developers is acquiring the land for real estate development. This new project is Mahindra Lifespaces' second residential development in Kandivali after its successful 'Mahindra Roots' project and will offer approximately 1 million sq. ft. of carpet area. The project is expected to be launched in FY 2023.

M&M Group enjoys a leadership position in farm equipment, utility vehicles, information technology and financial services in India. It is the world's largest tractor company by volume. It has a strong presence in renewable energy, agriculture, logistics, hospitality and real estate.

The scrip rose 0.18% to currently trade at Rs 842.15 on the BSE.

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