Mahindra & Mahindra reports ₹2,510 crore loss in Q4 FY20

MUMBAI: India’s largest tractor manufacturer and a leading maker of utility vehicles, Mahindra & Mahindra Ltd (M&M), reported a standalone loss of ₹2,510 crore for the January-March quarter compared to a net profit of ₹841 crore in the year-ago period.

The loss in the last quarter was on account of provisioning for impairment of certain long-term investment worth ₹2,780 crore.

Revenue from operations were at 9,144 crore, down 35% year-on-year.

Results were lower than the estimates of 16 analysts polled by Bloomberg who had projected revenue at ₹11,799 and a net profit of ₹462 crore.

The farm equipment segment posted a net profit of ₹549 crore, up 6% YoY, while the automotive business fetched a profit of ₹165 crore, down 77% YoY.

For fiscal 2020, revenues were at ₹45,488 crore compared with ₹53,614 crore in FY19.

M&M’s consolidated net loss was at ₹1,335 crore for the March quarter against net profit of ₹693 crore. Consolidated revenue from operations was at ₹20,182 crore, down 26% YoY.

"The net impact of the impairment losses and gains on disposal of /changes in ownership interest amounting to ₹1,782.55 crores for the quarter ended 31 March, 2020, has been recognised as exceptional items in the consolidated statement of profit and loss," the company said in a statement.

According to the Society of Indian Automobile Manufacturers data, M&M sold 34,113 passenger vehicles during the March quarter, down 56% from 77,607 units sold in the year-ago period. Commercial vehicle sales fell 40% on year to 41,028 units during the period.

The company sold 59,290 tractors during the March quarter, down only 2.6% on year.

Domestic vehicle sales have been declining due to a downturn in the economy which was aggravated by the outbreak of covid-19 fand the ensuing lockdowns first in China and then in India.