Mahindra Q4 profit rises 18 pc to Rs 2,637 cr; FY23 profit up 56 pc; company raises capex outlay

Driven by robust performance across business verticals, Mahindra & Mahindra on Friday reported an 18 per cent jump in its consolidated profit at Rs 2,637 crore for the March quarter and highest-ever annual profit of Rs 10,282 crore in FY23.

The auto maker also announced that its has revised upward the capital expenditure (capex) outlay for the three years cycle of FY22-FY24 to Rs 15,900 crore from Rs 15,075 crore.

The Mumbai-based company had reported a profit after tax (PAT) of Rs 2,237 crore in the January-March quarter of 2021-22 fiscal.

Revenue increased to Rs 32,366 crore for the fourth quarter of FY23, as compared to Rs 25,934 crore in the year-ago period.

For the year ended March 31, 2023, the company posted a consolidated PAT of Rs 10,282 crore, up 56 per cent, from Rs 6,577 crore in FY22.

The company said the FY23 PAT is its highest-ever profit reported in a fiscal year.

Revenue rose to Rs 1,21,269 crore last fiscal, as against Rs 90,171 crore in 2021-22 fiscal, an increase of 34 per cent.

M&M said the automotive business led the way last fiscal with 62 per cent growth, driven by strong execution of launches and an improvement in supply chain related issues.

Besides, Mahindra Accelo grew by 37 per cent; Mahindra Logistics, by 24 per cent; and Club Mahindra by 22 per cent.

''It has been a blockbuster year for the group. Auto led the way with record-breaking launches, as we regained the #1 position for SUV revenue market share,'' M M Managing Director & CEO Anish Shah said.

Light commercial vehicles (LCVs), farm equipment, and electric three-wheelers continue to strengthen the company's leadership position, he added.

''We are very well positioned for the future, based on a strong presence in key industries, leadership in technology and a growth mindset, coupled with fiscal discipline,'' Shah said.

The company reported highest-ever automotive segment volumes of 6.98 lakh in FY23, up 50 per cent, from 4,65,601 units in FY22.

The vertical posted revenue of Rs 16,400 crore, up 35 per cent as compared to FY22.

M&M said it was the leading player in the SUV revenue market share with fourth quarter share at 19.6 per cent.

It noted that open bookings for its SUV range stood at 2.92 lakh units as on May 1, 2023, reflecting continued strong automotive demand.

The company also reported highest-ever volumes of 4.04 lakh units in the farm equipment segment in FY23.

Tractor sales stood at 4,03,981 units last fiscal, up 15 per cent, from 3,50,981 units in the 2021-22 fiscal.

M&M Executive Director & CEO (Auto and Farm Sector) Rajesh Jejurikar said the company remained excited about the market momentum in both the auto and farm equipment segments and about crossing the milestone of 1.1 million vehicles in FY23.

''The response to new products has been very good with exciting new launches planned over the next 12 months. The efforts on cost management have led to consistent margin improvement,'' he noted.

Addressing the media after announcing the financial results, the company said it has revised upward the capex outlay for the three years cycle of FY22-FY24 to Rs 15,900 crore from Rs 15,075 crore.

Besides, an additional Rs 1,600 crore will go into the conventional ICE (Internal Combustion Engine) vehicles for the anticipated regulatory changes and capacity expansion, the company said.

Of the Rs 15,900 crore revised capex for FY22-FY24 cycle, an additional Rs 1,600 crore will go into the ICE vehicles for the anticipated regulatory changes and capacity expansion while an additional Rs 1,125 crore for the electric vehicle segment to produce vehicles with changing requirements, the automaker said in a presentation.

Another Rs 500 crore has been earmarked for auto and farm investments, said the Mumbai-based company which on Friday reported an 18 per cent jump in its consolidated profit at Rs 2,637 crore in the March 2023 quarter and highest-ever annual profit of Rs 10,282 crore in FY23.

The company continued to focus on value creation through capital allocation, partnerships and monetization, M&M said.

About the chip shortage, the company said it is going to be a ''wait and watch'' for the next few quarters.

Jejurikar said that the waiting period for the company's vehicle models was expected to come down substantially in the next six months with the capacity to be scaled up to 49,000 from 39,000 per month.

According to him, there was a production loss of up to 12,000 units during the March quarter due to the semiconductor shortage.

He said that there were no plans to launch any new product this year, which will be more about consolidation, and added the 5-door Thar will be launched in 2024, which earlier was being speculated for this year.

About the new emission norms, Jejurikar said that the company is ''not working on the development of BS-VIII version immediately'' as long as further clarification on the issue comes from the government. M&M noted that Tech Mahindra revenue rose 19 per cent with focus on margin transformation. Similarly, Mahindra & Mahindra Financial Services reported highest-ever disbursements with AUM up 27 per cent and GNPA improving to 4.5 per cent.

''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, monetisation and innovative partnerships continues to unlock value,'' M&M Group CFO Manoj Bhat said.

The company said its board recommended a dividend of Rs 16.25 (325 per cent) per share of the face value of Rs 5 each.

Shares of the company closed 0.34 per cent up at Rs 1,281.85 apiece on the BSE.