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M&M – Q2 Springs a Pleasant Surprise

Mahindra & Mahindra Ltd generated revenue of Rs. 11,590 crores during the quarter ended Sep 30, 2020, a 6% growth over the same period last year - driven by robust demand for the company’s tractor models from rural markets across the country.

The auto industry ecosystem, which includes dealers and suppliers, has also been quick to bounce back. Operations are near normal despite a few supply side constraints. The Indian auto industry, which includes two-wheelers, witnessed a mere 1% dip compared to the same period last year.

The Passenger Vehicle (PV) industry showed a growth of 17% after six quarters of de-growth. Utility vehicles have shown the most growth within the PV segment, with a growth of 21.2%, driven by rising demand from semi-urban and rural areas, coupled with a preference for personal mobility, new launches and the availability of affordable finance.

The Pick-Up segment also showed positive momentum with a growth of 6.2% over the previous year, due to a positive outlook in the rural and agri-sectors. Volumes are almost at pre-COVID levels in Q2 of this fiscal year.

But it is the Indian tractor industry which has shown its highest ever Q2 growth, an unprecedented 41.4%. Based on this, the company expects that the tractor demand will continue to remain robust during the current festive season.

The company’s overall financial performance has also been given a fillip with the launch of the All-New Thar on October 2, 2020. The response has been overwhelming with more than 20,000 bookings received so far.

With a strong performance in the tractor segment and a ruthless focus on costs, the company has achieved a very high OPM and a Profit After Tax (before EI) which is just 3% lower, as compared to Q2, FY-20. Consolidated revenues and other income of all Group companies for the half year ended September 30, 2020 stood at Rs. 60,245 crores (USD 8.2 billion).

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