NEW DELHI: Homegrown auto major Mahindra & Mahindra on Wednesday said that the est mated quantum of loss due to coronavirus-induced lockdown for March is around 23,400 vehicles and 14,700 tractors, while the same estimate for Q1 FY21 is 87,000 vehicles and 30,000 tractors.
In a regulatory filing, the company said its revenue and profitability will be impacted in line with the fall in volumes mentioned above.
“Profitability for the quarter and financial year ended March 31, 2020 will definitely be impacted... In the last two months, the company’s operations have been impacted due to very low to insignificant sales during the first three weeks of lockdown and costs being incurred.”Revenue and profitability will also be impacted in line with the fall in volumes in Q1 of FY21,” the company said.
Speaking about its capital and financial resources, M&M said it presently has adequate capital and financial resources to run its business. However, in a separate regulatory filing, it said it will consider raising of funds by way of issuance of securities but not limited to secured/unsecured redeemable non-convertible debentures on private placement basis, in one or more tranches / series.
Similar to other carmakers and commercial vehicle makers, M&M also reported zero sales in April. In May, after partial resumption of operations, it recorded 79 per cent decline in its domestic vehicle sales to 9,076 units. Currently, the only silver lining is its tractor sales, which went up by two per cent in May.
“Though it is difficult to predict the demand scenario for the immediate short term, we expect the tractor demand to show good improvement on the back of several positive factors such as record rabi
production, higher procurement and announcement of higher MSPs leading to better realisation to the farmers and outlook of a normal monsoon aiding sentiments for a good kharif crop,” M&M noted.
Boost for tractors
Factors such as record rabi production, announcement of higher MSPs leading to better realisation to the farmers and outlook of a normal monsoon to boost demand for tractors.