Homegrown auto major Mahindra & Mahindra (M&M) on Saturday reported a 73 per cent year-on-year decline in its net profit after tax (PAT) at Rs 380 crore for the third quarter ended December 31, 2019, due to an one-time impairment provision. The company had posted a net profit of Rs 1,396 crore in the same quarter last year. The results include figures of its commercial vehicle unit, Mahindra Vehicle Manufacturers.
"The Q3 FY20 results include a net loss on account of exceptional and one-off items of Rs 554 crore, as compared to a net gain on account of exceptional and one-off items of Rs 519 crores in Q3 FY19," M&M said in a filing to the Bombay Stock Exchange.
Total revenue fell by 6 per cent to Rs 12,120 crore in Q3 FY20, compared to Rs 12,893 crore in the corresponding quarter of the last year. The operating margin improved to 14.8 per cent as against 13.2 per cent in the same period last year.
During the October-December quarter, M&M sold 1,23,353 vehicles compared to 1,33,508 units sold in the same quarter last year, registering a decline of 8 per cent. The tractor sales declined by 6 per cent to 81,435 units in Q3 FY20 versus 87,063 units sold in Q3 FY19. In a similar trend, exports (vehicles and tractors) plunged 22 per cent to 9,633 units as against 12,363 units in the year ago period.
M&M said both the Indian auto and tractor industries have shown some signs of trend reversal in December quarter and seen moderation in the double digit de-growth registered in first two quarters of FY20.
"Good monsoon, festive season demand, improved liquidity conditions, new launches, especially in the Utility Vehicle (UV) segment, and special schemes offered by OEMs for the auto industry were the key reasons for this moderation in de-growth," M&M said in the filing.
The company said that the sentiment in the agri and rural economy is fairly upbeat, despite unseasonal rains in October which caused some damage to the Kharif crops, with good sowing of Rabi crops supported by very good water reservoir levels and government announcement for thrust on infra projects.
During Q3 FY20, Indian auto industry (excluding two wheelers) posted a decline of 3 per cent, as against decline of 15.4 per cent and 26.6 per cent in Q1 FY20 and Q2 FY20, respectively. The commercial vehicles (CV) industry remained in pain and posted a reduction of 17.3 per cent and the heavy commercial vehicle (HCV) goods industry reduced 56.4 per cent in Q3 FY20. In December quarter, the domestic tractor industry registered a 6 per cent decline as compared to year-ago period.
Bucking the trend, the utility vehicle (UV) industry witnessed a growth of 27.9 per cent in Q3 FY20 which helped the passenger vehicle (PV) industry to report a flat performance with a marginal decline of 0.6 per cent as compared to Q3 FY19.
By Chitranjan Kumar