Financial Insights That Matter
Byunder Mandia and Meenakish’s Miidhas
(Reuters) -Indian automaker Mahindra & Mahindra expects its sport utility vehicle (SUV) sales to grow by up to 19% in the current financial year, an executive said on Monday, citing strong interest in its combustion engine and new electric models.
“We continue to stay positive, given our portfolio and we will look at mid-to-high teens (percentage growth) for SUVs,” Rajesh Jejurikar, CEO of Mahindra’s automotive and farm businesses, said in a post-earnings press conference.
Mahindra leads sales of SUVs in India by revenue. It expects strong demand for its newer offerings, including electric vehicles, to boost growth even as the broader auto industry anticipates only 1%-2% growth.
Mahindra reported a 22% year-on-year increase in fourth-quarter profit at 24.37 billion rupees ($288.95 million) but fell short of analyst estimates of 25.23 billion rupees, hurt by a one-time charge and higher production costs related to its new EVs.
The EV-related costs also limited pre-tax profit margin growth for its mainstay auto business, which includes SUVs and small trucks, to 9.2% from 9% last year. Excluding the costs, Mahindra said it would have clocked a margin of 10%.
ELECTRIC VEHICLES
Mahindra’s new premium EVs, deliveries of which began on March 20, have helped it leapfrog EV leaders Tata Motors and MG Motor to the top spot by revenue in the quarter, the company said.
The BE6 and XEV 9e, Mahindra’s costliest models on offer, have showroom prices ranging from 2 million rupees to 3.1 million rupees.
India’s electric car sales crossed 100,000 units last financial year and competition is set to rise with the entry of new offerings into the nascent market, where green vehicles form just 2.5% of overall sales.
The sales also helped Mahindra’s EV unit, Mahindra Electric Automobile, report a positive EBITDA for the fourth quarter, group CFO Amarjyoti Barua said.
The company plans to raise the monthly capacity of EV production to 12,000 units a month by March from 8,000 currently.
Mahindra’s shares ended 3.3% higher after the results.
($1 = 84.3390 Indian rupees)
(Beter by Nandan Nandan Nangalluru;
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