Indian automaker Mahindra reports quarterly profit on improved demand

Credit: REUTERS/DANISH SIDDIQUI

Mahindra and Mahindra Ltd reported a profit for the first quarter on Friday, as demand for the Indian automaker's passenger vehicles and tractors improved.

Adds auto segment revenue, share move

BENGALURU, Aug 6 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS reported a profit for the first quarter on Friday, as demand for the Indian automaker's passenger vehicles and tractors improved.

The company, owned by Indian billionaire Anand Mahindra, said it sold 85,858 vehicles during the quarter, up 190%, while its tractor sales jumped 52% from a year ago when the first wave of the COVID-19 pandemic triggered a nationwide lockdown.

Car makers, including Mahindra, have seen a recovery compared with last year, but they remain under pressure due to rising commodity prices, a global shortage of semiconductors and uncertainty due to the pandemic.

"Commodity inflation and semiconductor supply issues continue to be of concern," the company said in an exchange filing.

The Mumbai-headquartered firm reported a consolidated net profit of 4.24 billion rupees ($57.15 million) for the three months ended June 30, compared with a loss of 976.2 million rupees a year earlier.

The company's loss in the first quarter last year was at a time when the Indian auto sector — already impacted by a bruising slowdown in demand — was hit by pandemic related restrictions.

Last week, rival Tata Motors TAMO.NS warned that a shortage of semiconductors, rising costs of raw materials and the pandemic-related uncertainty will have an impact on business in the short term.

Mahindra's revenue from the auto sector surged more than 190% during the quarter and it said the auto business was continuing to see a strong booking pipeline.

Its shares rose 0.95% by 0640 GMT, compared with a slightly weaker broader market .NSEI that was down 0.13%.

($1 = 74.1860 Indian rupees)

(Reporting by Chandini Monnappa in Bengaluru; editing by Uttaresh.V)

((Chandini.M@thomsonreuters.com; +918061822697;))

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