Mahindra & Mahindra on Friday reported a consolidated net profit of Rs 68 crore, down 97 per cent YoY for the quarter ended June 2020. The company had reported a profit of Rs 2,260 crore a year ago. The figure includes profit from its manufacturing unit (MVML).
An ET Now poll had projected a net profit of Rs 200 crore for the company.
Sales for the homegrown auto giant plunged to Rs 5,589 crore, down 56 per cent from Rs 12,805 crore a year ago.
“After the first ever zero sales in the month of April, the industry is finding its way back. The company’s key brands which have a strong rural bias saw good demand in the month of June,” the firm said in a release.
However, the company said low pipeline inventory coupled with the challenges of ramping up production due to supply chain issues affected the company’s sales.
It sold 27,565 units of vehicles and 64,140 units of tractors during the quarter, down 78 per cent and 22 per cent YoY. Total exports were at 3,109 units, down 72 per cent.
“The timely relaxation of the lockdown for the agricultural sector along with positive rural sentiment led to good sales numbers for tractors during the quarter despite the supply chain issues, showing a positive growth rates in May and June 2020,” the company said.
The company added that while the government’s effort to provide support to the economy has been positive, there remains a need for further support from the government on the demand side.
The board of the company also approved to seek shareholder approval to reduce its stake in SsangYong Motor Company, a material subsidiary of the Company based in Korea to less than 50 per cent.