Shares of auto major Mahindra and Mahindra Ltd (M&M) tumbled as much as 7% in intraday trade on Monday after the company’s earnings for the third quarter ended December (Q3) disappointed the Street.
At 2:53 pm, M&M shares were trading at Rs 531.10, down 6.7%, after hitting the day’s low of Rs 529.30. The auto stock has fallen 18% in the last one year compared with an 11% rise in the benchmark Nifty 50 index.
M&M on Saturday said profit has declined by a whopping 72.8% year-on-year in the December quarter to Rs 380.19 crore due to a one-time impairment provision. The company had posted a profit of Rs 1,395.96 crore in the same period a year ago. After excluding exceptional and one-off items, profit stood at Rs 934 crore during the quarter against Rs 877 crore during the year-ago quarter.
M&M’s revenue from operations during the December quarter fell 6% to Rs 12,120.3 crore compared with a year ago. The automotive business revenue saw a decline of 6.2%, while the farm equipment segment witnessed a drop of 7.7%.
The company said it sold 1.23 lakh vehicles and 81,435 tractors in the quarter ended December, down 8% and 6% year-on-year, respectively.
The company’s operating profit margin for the December quarter jumped to 14.8% from 13.2% a year ago.
Meanwhile, M&M also announced that Anand Mahindra will continue as the executive chairman of the company till 11 November 2021. Pawan Goenka and Anish Shah would continue to report to Anand Mahindra, the regulatory filing to stock exchanges said.
Market regulator Securities and Exchange Board of India (Sebi) had earlier mandated the top 500 listed entities to separate the roles of chairperson and managing director (MD) or chief executive officer (CEO) by 1 April 2020. The date of implementation of the provision was, however, deferred to 1 April 2022 as companies sought more time to comply with the order.