India’s Mahindra and Mahindra reports surge in quarterly profit

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FILE PHOTO: The logo of Mahindra and Mahindra is seen at a showroom in Mumbai

By Chandini Monnappa

BENGALURU -Indian automaker Mahindra and Mahindra Ltd reported a 57% jump in third-quarter profit on Thursday, boosted by higher revenues that offset an increase in costs due to supply chain disruptions and semiconductor shortages.

The company, chaired by Indian billionaire Anand Mahindra, said it also saw a sharp rise in exports of automobiles and tractors in the October-December quarter.

Carmakers are seeing a pickup in demand compared to pandemic-hit 2021, but production has come under pressure from a global chip shortage and rising commodity prices. Several major Indian carmakers raised prices last year to pass on some of the excess costs to customers.

“Our auto business has done well despite supply side challenges, while our farm business has shown market share increase despite a slowdown in the market,” Anish Shah, managing director at Mahindra said in a statement to the stock exchange.

Mahindra’s revenue from the auto sector grew 15% during the reported quarter and it said the auto business was continuing to see a strong booking pipeline with more than 155,000 pending orders for its vehicles.

Consolidated net profit from continuing operations rose to 19.87 billion rupees ($265.11 million) for the quarter ended Dec. 31, from 12.68 billion rupees a year ago.

Last month, rival Maruti Suzuki India said it expected the chip crisis to ease, but higher commodity prices remained a concern.

Mahindra’s shares rose 0.9% by 0710 GMT, compared with broader market which was up 0.74%.

($1 = 74.9510 Indian rupees)

(Reporting by Chandini Monnappa in Bengaluru and Aditi Shah in New Delhi; Editing by Shailesh Kuber)