M&M slides after weak sales in March

Mahindra & Mahindra (M&M) slid 4.21% to Rs 273 after total auto sales slumped 88% to 7,401 units in March 2020 from 62,952 units in March 2019.

Domestic auto sales tanked 90% to 6,130 units in March 2020 from 59,012 units recorded in March 2019. Total auto exports dropped 68% to 1,271 units in March 2020 over 3,940 units produced March 2019.

On a sequential basis, total auto sales declined 77.21% in March 2020 from 32,476 units registered in February 2020.

Commenting on the performance, Veejay Ram Nakra, the chief executive officer of automotive division of M&M, has said that, Our performance in March has been muted on account of the impact of the current lock-down related to Covid-19 and the disruption in our BS VI ramp-up plan. The latter was planned between February and March but was affected due to the challenges of parts supply from global and local suppliers. We have been able to clear our BS IV inventory, but for fewer than 100 vehicles. However, there are many vehicles that are sold, but not yet registered because of the closure of RTOs.

M&M Farm Equipment Sector's (FES) total tractor sales slumped 31% to 13,613 units in March 2020 from 19,688 units in March 2019. Domestic tractor sales in March 2020 were at 13,418 units, as against 18,446 units during March 2019, down by 27% Y-o-Y. Tractor exports for the month tanked 84% to 195 units in March 2020 from 1,242 units in March 2019.

Speaking on the performance, Rajesh Jejurikar, the executive director of Auto & Farm Equipment Sectors of Mahindra & Mahindra, has stated that, We have sold 13,418 tractors in the domestic market during March 2020.The month was disrupted as business was hugely impacted by the lockdown just before the start of festive days in large parts of the country. In compliance with the regulations, the anticipated retail surge and billing totally stopped in all states. The Central Government has taken timely initiatives for the farming community in the form of specific relief packages. We hope this will help bring in momentum for tractor sales, after the lockdown ends. In the exports market, we have sold 195 tractors. The auto sales were announced during market hours today, 1 April 2020.

On a consolidated basis, the company's net profit slumped 84.74% to 199.94 crore on a 4.45% fall in net sales to Rs 25,019.86 crore in Q3 December 2019 over Q3 December 2018.

Mahindra & Mahindra (M&M)'s segments include automotive, farm equipment, financial services, real estate, hospitality and others. Automotive segment comprises of sale of automobiles, spares, mobility solutions and construction equipment. Its farm equipment segment comprises of sale of tractors, implements and spares.

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