M&M Q2 profit down 78 per cent at Rs 368 crore

New Delhi: Mahindra & Mahindra on Friday reported 78.44 per cent decline in consolidated profit after tax (PAT) at Rs 368.43 crore for the quarter ended September 30, 2019.

The company had posted a PAT of Rs 1,708.92 crore for the same quarter last fiscal, M&M said in a regulatory filing. Revenue from operations during the period under review stood at Rs 23,935.93 crore as against Rs 25,431.02 crore in the same quarter a year ago, down 5.89 per cent, it added.

Automotive sector posted revenue of Rs 12,058.79 crore as compared to Rs 14,330.54 crore in the year-ago period, while farm equipment sector registered Rs 5,369.89 crore as against Rs 5,451.20 crore in the second quarter last fiscal, the company said.

Financial services vertical posted revenue of Rs 2,880.12 crore, up from Rs 2,458.33 crore in the year-ago quarter. Hospitality segment also posted higher revenue at Rs 555.37 crore as compared to Rs 479.72 crore in the second quarter a year ago.

Revenue from real estate vertical was also up at Rs 329.39 crore from Rs 84.55 crore in the second quarter last fiscal. During the quarter, the company sold a total of 1,10,824 vehicles as against 1,41,163 units in the corresponding period last fiscal, down 21 per cent.

Tractor sales in the second quarter stood at 68,359 units as compared to 73,012 units in the same period a year ago, down 6 per cent, it added.

"The Indian economy continues to cope with suppressed consumer sentiment and a continuing liquidity crunch which coupled with the high consumer finance rates due to non-transmission of repo rate reduction is impacting demand," M&M said.

The Indian auto industry, in particular, is undergoing a challenging period with all industry segments declining for two consecutive quarters for the first time in the last 15 years, it added.

Despite such a challenging environment leading to a volume drop in both its segments, the company with strong emphasis on cost management, ensured that the EBITDA drop was in line with the revenue decline. It also successfully increased its market share in tractors as well as passenger vehicles, it added.