Mahindra & Mahindra on Friday announced the March quarter results for FY23. The company’s standalone net profit surged 22% at ₹1,548.97 crore in the January to March quarter this year, as against ₹1,268.55 crore in the same period last year led by automobile and farm equipment segments. The company’s revenue from operations surged as much as 30.9% to ₹22,571.37 crore from ₹17,237.76 crore in the same period last year.

On a sequential basis, the company’s profit and revenue surged marginally by 1.37% and 4.2%, respectively. In FY23, the company's revenue from operations surged by 47% YoY to ₹84,960 crore, whereas its profit surged by 35.2% YoY to ₹6,548.64 crore.

"Secular revenue growth across the group along with strong operating leverage has helped us cross the milestone of Rs 10,000 cr in profits. Our sharp focus on capital allocation, monetization and innovative partnerships continues to unlock value," says Manoj Bhat, Group Chief Financial Officer, M&M Ltd.

SUVs drive Mahindra's automobile growth:

During the quarter under review, the automobile segment revenue from operations surged 35% to ₹16,400 crore as against ₹12,185 crore in the same period last year. The segment’s profit before tax stood at ₹1,190 crore, up 82% YoY as against ₹653 in the same period. In FY23, the automobile segment's standalone revenue was up 63% YoY at ₹58,511 crore, whereas the profit before tax stood at ₹3,750 crore, up 194% YoY.

The company continued to retain the top position in the SUV segment for the 5^th consecutive quarter, with a market share of 19.6%. The volumes during the quarter under review stood at 99,112 units. In FY23, the company’s total SUV volume stood at 69,85,000 units, with a 19.1 % market share.

As on May 1^st 2023, the company has an open booking of 2,92,000 units of XUV300 & XUV400, XUV700, Thar (in RWD), Bolero and Scorpio N. Amidst the semiconductor woes, the company has decided to not launch any new products for CY23. However, its new products will be launching in CY24.

Mahindra bets big on EVs

In the March quarter, Mahindra Group recorded the highest-ever sales of 1,47,000 units in the electric three-wheelers segment, with a market share of 67%.

Mahindra and Mahindra, in December last year said told that Mahindra Last Mile Mobility, which caters to the production of electric three-wheelers and four-wheelers would be a separate entity. The company made an investment of ₹10,000 crore in its Pune EV manufacturing facility over the next 7-8 years.

As part of its expansion plans the company, which already has an EV manufacturing facility in Zaheerabad, will increase the state-of-the-art battery assembly line in Zaheerabad. Mahindra Group will also introduce a new Treo line and increase the capacity expansion at Haridwar.

Semiconductor woes prolong SUV waiting period

Just like its peers, Mahindra Group is also grappling with a semiconductor shortage which is hindering its plans for capacity expansion. The company’s flagship SUVs such as XUV400, XUV700 and Thar (in RWD) are currently witnessing long waiting periods.

Rajesh Jejurikar, Executive Director & CEO (Auto and Farm Sector), M&M Ltd, during a press briefing, said, “We had said that by March 2023, we would at 39,000 capacities for SUVs. That’s been done. But the gap which we are seeing between the actual volume which is 34,000 and 39,000 is not the capacity but specific semiconductor shortage. There will be some short-term issues around some semiconductors not being available, which may impact us.”

The company in the past had shared that the semiconductor woes have been impacting ramp-ups of Scorpio and XUV700 specifically. "The next wave of capacity increase will be 6-7 months later, that’s when we will go from 39,000 to 49,000. This is when XUV700, Scorpio and all will move from their current capacity of 6,000 to 10,000 units. So its after that we see the waiting period coming down."

According to Jejurkar, the number of new bookings for XUV700 is around an average 8,000 units per month, which is higher than the company's current production capacity. "So the rate of new bookings, despite the open bookings, is higher than what we are producing. As we have said in the past this is not the situation we are happy with," Jejurkar says, adding that the company is hopeful of the number of open bookings coming down in the next 6-7 months.

According to Jejurikar, for XUV400 and XUV700, the company is sourcing the batteries from a Korean supplier amidst the semiconductor shortage.

Mahindra SUVs

Mahindra & Mahindra Q4 profit up 22% to ₹1,548.97 cr; led by automobile segment