NEW DELHI: Two of India’s leading automakers—Mahindra & Mahindra and Eicher Motors—reported steep declines in earnings for the quarter ended March 31 (Q4FY20), reflecting the sorry state of India’s automobile industry.
Tractor and utility vehicle major M&M reported a consolidated net loss of Rs 3,255 crore in Q4FY20, while the popular bullet maker Royal Enfield’s parent firm Eicher reported a 44 per cent year-on- year fall in its Q4 profit at Rs 304.28 crore.
On a standalone basis, M&M posted a net loss of Rs 2,502 crore in Q4FY20 as against a net profit of Rs 849 crore reported in Q4FY19. Mahindra’s revenue dipped 35 per cent year-on-year to Rs 9,005 crore during the quarter on account of lower industry volumes in both automotive and tractor segments, the transition to BS-VI norms and the abrupt lockdown sparked by the pandemic.
For Mahindra, Profit After Tax after exceptional items was mainly impacted due to the write down of its investment in its Korean unit Ssangyong and a few other international subsidiaries. The company has recognised a loss of Rs 2,780.47 crores for the quarter as exceptional items.
Pawan Goenka, MD of M&M said that the company is planning to give up control of struggling SsangYong Motor and is working to secure an investment. It is also re-examining its outlook for other international subsidiaries and joint ventures.
Eicher Motors’ total revenue from operations was recorded at Rs 2,208 crore, down by 12 per cent compared to Rs 2,500 crore in the corresponding quarter of FY 2018-19. Royal Enfield sold 163,083 motorcycles in the quarter, a decline of 17 per cent from 197,567 motorcycles sold over the same period in FY 2018-19, while VECV sold 11,629 trucks and buses in the quarter, a decline of 45 per cent from 21,010 units sold in the same month last year.
Difficult times
Siddhartha Lal, MD of Eicher Motors says that this has been a “tough year” for the overall automobile industry due to the pandemic