Consolidated PAT (after EI & NCI) for Q3F21 was
Capital allocation actions were targeted at loss-making subsidiaries, these actions have made a significant contribution to the financial performance. They include turnaround of businesses, restructuring to achieve profitability and exit from multiple businesses.
The increase in operating margins was driven by cost optimization and operating leverage. Tractor volumes grew by 19.6% on the back of a robust rural story. We expect strong demand to continue.
Demand for Auto continues to be strong. The UV business grew 11% though production was lower than demand due to ECU and steel shortage.
The key results are as follows:
https://www.mahindra.com/news-room/press-release/consolidated-pat-up-by-252-percent
Key highlights of Q3 performance were:
Capital allocation decisions have resulted in an improved financial performance.
Domestic tractor volume was 97,420, which is the highest ever quarterly volume.
Highest ever quarterly PBT and ROCE for Farm, driven by a 400 bps yoy increase in margins.
Farm Int'l subsidiaries recorded a break-even PBIT for the second consecutive quarter.
Management of working capital, which is negative for both Auto and Farm sectors.
Thar: cumulative bookings crossed 38,500 mark on
Resilient margins for Auto, despite supply issues.
Areas of concern were:
Supply issues: Shortage of semi-conductors impacted availability of ECUs, due to a high dependence on one supplier.
Steep increase in commodity prices, partially offset by a sales prices increase and value engineering actions.
Additional information:
SYMC filed an application before the
Mahindra Finance has taken a conservative approach with very limited restructuring and a higher provisioning due to 'earn and pay' borrowers. While the overall customer cashflows have shown improvement, it is yet to return to pre-COVID levels.
Industry & Outlook:
https://www.mahindra.com/news-room/press-release/consolidated-pat-up-by-252-percent
Growth momentum for the tractor industry was supported by positive sentiment in rural parts of the country, specifically the agri economy which is driven by (i) Very good monsoon (ii) Healthy reservoir levels (iii) record kharif production (iv) good rabi sowing (v) Continued high Central Government spending in Agriculture and
For Auto, with many key indicators showing positive momentum, calendar year 2021 has started with strong momentum. However, some significant challenges do exist especially on the supply side and commodity prices.
The RBI expects GDP growth to move into positive territory in the December quarter itself albeit at 0.1 per cent. Further, rising bank credit growth and infrastructure investment oriented government final consumption expenditure (GFCE), amplified by an out-and-out 'growth Budget' will provide valuable counter-cyclical support to GDP growth. The
Note: Translation of rupee to dollar is a convenience translation at the average exchange rate for the twelve month period ended
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