Net profit soars 785% YoY, beats estimate; sales rise 15%, BFSI News, ET BFSI
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The year-on-year jump in net profit for the automaker is largely because of a more than Rs 1,400 crore asset impairment charge taken by the company in the year-ago quarter. In the current quarter, M&M took a Rs 255 crore asset impairment charge, the company said.
The tractor manufacturer reported a 14.7 per cent on-year growth in revenue from operations to Rs 13,305.4 crore for the reported quarter, which was also above Street’s estimate of Rs 12,428.9 crore.
“We have seen significant all around improvement in our performance this quarter. Our strong show in the Auto and Farm sectors was complemented well by the improved performance in the group companies,” said Anish Shah, managing director and chief executive officer at M&M.
While the topline and bottomline of the company were impressive, its operating performance suffered due to surge in input costs.
M&M’s operating profit for the reported quarter slumped 19 per cent YoY to Rs 1,660 crore largely because of a 40 per cent spike in cost of raw material used by the company. The tractor maker’s margins shrank 527 basis points on year to 12.47 per cent in the reported quarter.
“Commodity prices have impacted our margins in both the Auto and Farm business, but our focus on cost management and optimisation has helped mitigate some of the impact,” said Manoj Bhat, group chief financial officer at M&M.
M&M said that its automotive segment saw robust demand despite global semiconductor shortage hampering production in the quarter. The company added that the segment’s booking pipeline was healthy and there is buoyant demand for its products.
The farm business reported its second best performance in history aided by a 190 basis points improvement in market share for the tractor business, M&M said.
Shares of M&M were up 2.3 per cent at Rs. 878.9 on the National Stock Exchange.
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