Mahindra & Mahindra's profit is down 4.5 percent year over year, but revenue is up 12 percent

Mahindra & Mahindra reported a 4.5 percent drop in standalone net profit for the March quarter, at Rs 1,292 crore, on May 28.

It increased by 427 percent from a year before, when profit was affected by an extraordinary charge of Rs 753 crore, when it would have been Rs 998 crore and profit would have increased by 17 percent in the current quarter.

The Mumbai-based automaker's standalone revenues increased by 12% quarter over quarter to Rs 17,124 crore. They increased by 28.4 percent year over year.

"Our March quarter and FY22 results demonstrate the strength of our business concept." Despite considerable obstacles posed by variables such as Covid, commodity pricing, semiconductor shortages, and the Ukraine conflict, we achieved good consolidated results. Anish Shah, managing director and chief executive officer, stated, "All of our group firms are well positioned to capitalise on growth possibilities."

From April to March 2022, standalone PAT after extraordinary item increased by 401.5 percent to Rs 4,935 crore, up from Rs 984 crore profit after exceptional item the previous year.

Without accounting for unusual factors in both financial years, earnings for FY22 climbed by 26.4 percent to Rs 5,144 crore from Rs 4,071 crore the previous year.

In FY22, standalone revenues increased by 28.7% to Rs 57,446 crore.

Compilation of data

For the quarter under review, consolidated PAT increased 47.8% year on year to Rs 2,237 crore. Profit increased by 12.6 percent year over year.

The company's total sales for the quarter increased by 21% year on year to Rs 25,934 crore. The rise was 10% sequentially.

"In FY22, we had our greatest revenue in the car and agricultural area," said Rajesh Jejurikar, executive director.

"Despite market slowdown and significant commodity inflation, demand for the automotive product portfolio remains robust, as the farm equipment sector (FES) recorded the second highest full-year PBIT (profit before interest and tax)," Jejurikar stated. He expects the economy's cost pressures to ease as a result of recent fiscal and monetary initiatives.

Volumes

During the quarter under review, the company's vehicle sales volumes increased by 43% year over year to 1,52,204 units. Tractor sales fell by 23% year over year to 72,058 units.

Sales of automobiles increased by 31% to 4,55,570 units for the entire year. In FY22, tractor sales remained steady at 3,50,981 units.

Tractors in the farm equipment category grew their market share by 1.8 percent to 40% year over year.

In FY22, automotive exports increased by 77 percent, while farm equipment exports increased by 66 percent to 17,500 units.

More than 170,000 open bookings were seen across the company's goods, with 78,000 for the company's recently debuted sport utility vehicle XUV7OO alone.

Margin

The standalone EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin fell 320 basis points year over year to 11.4 percent in the quarter under review, while it fell 40 basis points sequentially. The drop in EBITDA margin was much more dramatic for the whole year, dropping 330 basis points to 12.3 percent from 15.6 percent in FY21.

The standalone net margin (before extraordinary items) for the quarter fell 70 basis points year over year to 6.8%, but fell 140 basis points sequentially. In FY22, net margin remained unchanged at 9%, compared to 9% the previous year.

Dividend

For the fiscal year ending March 2022, the business suggested a dividend of Rs 11.55 per ordinary (equity) share, which is 231 percent of the Rs 5 face value.

On the National Shares Exchange, the stock closed Rs 23.05 higher at Rs 952.85 on May 27. It has returned 15% over the last year and is up 2.8 percent in the last month.