M&M slips as second wave of COVID-19 to impact sales

Mahindra & Mahindra fell 1.34% to Rs 765.20 after the company said that the estimated sales volume for the quarter ending June 2021 will be lower by 15-20% as compared to Q4 F21.

The revenue and profitability will be impacted in line with the fall in volumes. However, the company is taking various cost optimisation measures to limit the adverse impact, M&M said in a statement.

The auto maker said that with the rampant spread of the second wave of COVID-19 and lockdowns enforced in various states / parts of the country coupled with disruption in the supply of oxygen for industrial use, demand and supply for vehicles and tractors is expected to be impacted temporarily.

 

In addition, on the supply side, global shortage of micro-processors (semi-conductors) used in electronic control unit (ECUs) fitted in different components / aggregates for vehicles continues to pose challenges to the smooth production schedules.

In view of this, the company is carefully reviewing the demand & supply situation and re-calibrating its operations accordingly while protecting the interest of its customers, dealers and suppliers. The endeavour is to ensure optimal level of inventory at plants & dealerships in order to be prepared for a rebound in demand once the situation returns to normalcy.

Mahindra & Mahindra's (M&M'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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