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In Q4FY21, revenue was up 48% at Rs.13338Cr. The company’s profit before the exceptional loss was up 210% YoY at Rs.1002Cr. versus Rs.323Cr. in Q4FY20. reported profit came at Rs.163Cr versus Rs.3255Cr loss last year. EBITDA rose 60% YoY, while margins were up from 13.6% last year to 14.7% in Q4FY21. The company recorded an exceptional loss of Rs.840Cr. due to impairment provisions for certain long-term assets and other exposures.
The company also announced a dividend of Rs. 8.75 per share for FY21 which is the highest ever in the history of M&M. Such a dividend is in the light of the strong financial performance and to commemorate the 75th year of the Company.
Farm equipment sector revenue was up 60% while the auto sector revenue up 43% in Q4FY21.
Management shares a strong demand outlook for the industry and feels the recovery in demand likely to be more aggressive than last year. As per the management, demand in the rural market is getting back slowly. Expect tractor demand to start returning by June, UVs to be back by July 2021.
For the company, semi-conductor issues still continue to put pressure on the supply chain. Whereas, commenting on the current commodity inflation cycle they say it continues to put pressure on margins.
M&M is in the final phase of impairments for their capital allocation policy. Classification of their business into A, B, C categories has completed. All their core biz such as tractors, farm equipment, and auto remain in the A category. They have seen good growth in all their core sectors entering into Q1. Post-strong results the stock closed holding 2.2% of gains.
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