Mahindra & Mahindra (M&M) posted a 16.07 per cent decline in its consolidated net profit to ₹969.25 crore for the fourth quarter of FY19 from ₹1,154.88 crore of last year’s corresponding quarter. This includes numbers for Mahindra Vehicle Manufacturers Limited (MVML).

“The muted demand in rural India on account of poor distribution of the South-West monsoon, a deficit North-East monsoon and weak agricultural incomes due to poor price realisation, stress in the NBFC sector leading to tight credit conditions along with low demand in urban India and the overall sluggishness in the economy led to a fall in both the tractor and automotive industry during Q4 of FY19,” the company said in a release.

Net revenue from operations rose to ₹13,807.88 crore during this quarter — up by 4.69 per cent from ₹13,188.76 crore in the fourth quarter of previous fiscal.

Sales performance

M&M said its total vehicle sales during the fourth quarter were at 1,63,937 units, compared to the 1,56,453 units it sold during the fourth quarter of FY18, registering a growth of of around 5 per cent.

The company sold 56,903 tractors in the domestic market and exported 3,341 tractors during this quarter, posting a decline of 14.9 per cent and 10.9 per cent respectively.

As for the passenger vehicle segment, it sold 77,607 vehicles during the quarter under review — a growth of seven per cent over the corresponding quarter of the previous year.

M&M also exported 10,200 vehicles during the quarter registering a growth of 17.1 per cent.

The launch of the cheetah-inspired XUV300 has helped the company grow its utility vehicle sales by 6.8 per cent in Q4 of FY19, with a market share of 27.9 per cent, the company said. According to the company, the XUV300 became the second-highest selling sub-4 metre SUV brand in India.

“M&M now has three strong new products which will see full year impact on volumes in FY2020,” the company said.

BS-VI transition

Pawan Goenka, Managing Director, M&M, said that there are five factors to watch out for in this financial year: the policies of the new government, the availability and affordability of finance, monsoon, trade protectionism and sanctions as well as the transition to BS-VI.

Talking about the BS-VI transition that is set to happen from April 1, 2020 onwards, Goenka said, “The biggest unknown this year is how much pre-buying will happen. And that is the biggest challenge that we have as OEMs on how to plan our inventory...We cannot sell BS-VI (vehicles) before the fuel is ready and nobody will buy BS-VI when BS-IV is available because the cost will be higher. Therefore, to plan that is the biggest concern. But, all in all, we do think there is some pre-buying that will happen in the fourth quarter of the year.”

 

 

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