The Board of Administrators of Mahindra & Mahindra Restricted as we speak introduced the monetary outcomes for the quarter ended thirty first December 2020 of the Firm and the consolidated Mahindra Group.
Consolidated PAT (after EI & NCI) for Q3F21 was Rs 704 crores, a rise of 252% from the prior 12 months. The important thing drivers have been capital allocation actions, a 220 bps improve in standalone* working margins on the again of a 20% development in tractor volumes and a 12% income improve within the Auto enterprise.
Capital allocation actions have been focused at loss-making subsidiaries, these actions have made a major contribution to the monetary efficiency. They embody turnaround of companies, restructuring to attain profitability and exit from a number of companies.
The rise in working margins was pushed by price optimization and working leverage. Tractor volumes grew by 19.6% on the again of a strong rural story. We anticipate sturdy demand to proceed.
Demand for Auto continues to be sturdy. The UV enterprise grew 11% although manufacturing was decrease than demand resulting from ECU and metal scarcity.
The important thing outcomes are as follows:
- Capital allocation selections have resulted in an improved monetary efficiency.
- Home tractor quantity was 97,420, which is the best ever quarterly quantity.
- Highest ever quarterly PBT and ROCE for Farm, pushed by a 400 bps yoy improve in margins.
- Farm Int’l subsidiaries recorded a break-even PBIT for the second consecutive quarter.
- Administration of working capital, which is unfavorable for each Auto and Farm sectors.
- Thar: cumulative bookings crossed 38,500 mark on 1st February 2021 with 6,000+ new bookings in January 2021.
- Resilient margins for Auto, regardless of provide points.
- Tech Mahindra noticed vital enchancment in profitability resulting in sturdy EBITDA margins and a constant cashflow conversion for the quarter. Deal wins have normalized to pre-COVID ranges.
- Mahindra Logistics reported report quarterly revenues (15% YoY) pushed by demand for built-in options from E-commerce, Client & Freight Forwarding.
Areas of concern have been:
- Provide points: Scarcity of semi-conductors impacted availability of ECUs, resulting from a excessive dependence on one provider.
- Steep improve in commodity costs, partially offset by a gross sales costs improve and worth engineering actions.
Further data:
- SYMC filed an software earlier than the Chapter Court docket for graduation of rehabilitation proceedings on 21st December 2020. It’s now getting ready and plans to submit a pre-packaged rehabilitation plan (“p-plan”) with fairness funding from an investor and debt from native lenders. There is no such thing as a improve in M&M publicity as in comparison with Q2 FY21.
- Mahindra Finance has taken a conservative strategy with very restricted restructuring and the next provisioning resulting from “earn and pay” debtors. Whereas the general buyer cashflows have proven enchancment, it’s but to return to pre-COVID ranges.
Trade & Outlook:
Progress momentum for the tractor trade was supported by constructive sentiment in rural elements of the nation, particularly the agri economic system which is pushed by (i) Superb monsoon (ii) Wholesome reservoir ranges (iii) report kharif manufacturing (iv) good rabi sowing (v) Continued excessive Central Authorities spending in Agriculture and Rural Improvement. On the again of those constructive components, it’s anticipated that tractor demand will stay sturdy through the coming quarter as properly.
For Auto, with many key indicators displaying constructive momentum, calendar 12 months 2021 has began with sturdy momentum. Nevertheless, some vital challenges do exist particularly on the provision aspect and commodity costs.
The RBI expects GDP development to maneuver into constructive territory within the December quarter itself albeit at 0.1 per cent. Additional, rising financial institution credit score development and infrastructure funding oriented authorities last consumption expenditure (GFCE), amplified by an out-and-out “development Finances” will present worthwhile counter-cyclical assist to GDP development. The IMF now additionally estimates India to develop 11.5 per cent within the subsequent monetary 12 months earlier than settling at 6.8 per cent in 2022-23 – making India the fastest-growing massive economic system on the earth in each the years.
SOURCE: Mahindra
