Mahindra Q4 profit up 4% to ₹2,754 cr; to invest ₹12,000 cr in EV unit

Mahindra & Mahindra (M&M) Ltd has reported a 4% increase in its net profit at ₹2,754 crore for the January-March quarter of 2023-24, driven by auto and farm sector segments, according to a regulatory filing. During the year-ago quarter, M&M had reported a quarterly profit of ₹2,637 crore.

The revenue grew 9% to ₹35,452 crore in the fourth quarter against ₹32,456 crore in the same quarter last year. Mahindra's full fiscal year profit surged 25% to ₹11,269 crore against ₹9,025 crore in 2022-23. The full-year revenue surged 15% to ₹1,39,078 crore against ₹1,21,362 crore in the year-ago period.

Mahindra & Mahindra says its auto business had another “solid year” with profits growing 2.5x. "Farm improved market share in a declining industry. Financial services made strong progress on asset quality with record low GS3. Growth gems progressed well on the 5x challenge with continued value unlocking."

In auto, the company's volume surged 14%, with the open bookings of SUVs at 2,20,000 as on May 1, 2024. The auto segment Q4 PAT was ₹1,345 crore, up 3x, while full-year profit came in at ₹4,714 cr, up 2.5x, excluding PY trucks impairment. The business reported a 22% surge in revenue at ₹20,908 cr, while the full-year revenue increased 24% to ₹76,156 crore.

In the farm business, M&M's tractor market share at 39.4% was down 130 bps in Q4 FY24. Profit in Q4 and full year was ₹588 cr, down 17%, and ₹3,573 cr, up 2%, respectively. The revenue was ₹6,790 crore, down 22%; and ₹33,474 cr, down 2% in Q4 and FY24, respectively.

In services, Mahindra's FY24 profit increased 44% to ₹821 crore and a full-year profit came in at ₹2,982 crore, down 18%. The revenue in the respectively periods stood at ₹8,855 crore and ₹33,371 crore crore, respectively.

Anish Shah, MD & CEO, Mahindra & Mahindra, says it has been an excellent year with most of the company’s businesses delivering “high level” of performance. “Auto continued its high growth trajectory, Farm gained share in a tough market and Mahindra Finance delivered on asset quality. TechM was a weak spot, the turnaround has commenced with the new organisation in place. Growth gems are performing well, with Susten and LMM leading the way.”

The company has recommended a dividend of ₹21.10 (422%) per equity share of the face value of ₹5 each.

Mahindra approves ₹12,000 cr for EV project

Mahindra & Mahindra says it has approved an investment of ₹12,000 crore in Mahindra Electric Automobile Limited (MEAL) to fund our EV journey over the next 3 years. “M&M and its auto division expect to generate sufficient operating cash to satisfy all our capital investment needs and are not looking to raise additional capital,” says the company.

M&M and BII have agreed to extend the timeframe for the final tranche of BII’s planned investment of ₹725 crore, and will jointly assess whether additional investment is required by December 31, 2024.

“BII has invested ₹1,200 crore and Temasek has invested ₹300 crore so far in MEAL. Temasek will be investing the balance ₹900 Cr. as per the agreed timelines,” says the company.

The development comes following the execution of Securities Subscription Agreement and Shareholders’ Agreement between the M&M and British International Investment Plc (‘BII’) on February 21, 2023. Subsequently, on August 3, 2023, it also intimated about Jongsong Investments Pte Ltd (“Temasek”) agreeing to invest in MEAL, in one or more tranches.