Mahindra & Mahindra (M&M) recovers from the lows to trade near the day's high post their Q4 earnings following a strong internal showing.
CNBC-TV18’s Parikshit Luthra spoke to Anish Shah, MD and CEO of Mahindra Group.
When asked whether the Q4 performance was largely on account of the cost efficiency measures and the loss making entities they exited in FY21, Shah said, “Those are the two key things that have driven Q4 performance but in addition to that also we have seen strong revenue growth for both farm and auto businesses. So the operating performance has been very strong. I also want to highlight the fact that our cash generation has been phenomenal this year. We have generated operating cash of Rs 10,000 crore which is up from Rs 4,600 last year.”
On demand, Shah said, “What we are seeing now over the past week or so more renewed optimism, we are seeing cases go down in multiple areas around India and that is resulting some of the dealers opening up, more demand coming back in. So our expectation is that we will start ramping up in June and then get back closure to where we were in January and February in the July onward timeframe.”
“Over the last week or so we have started to see some easing of the challenges that we faced and as a result we are expecting a higher demand to start coming up in the next few months. If COVID continues at the current trajectory where it is reducing around India then that is a positive sign for us.”
On exceptional losses, he said, “Over the last couple of years we have essentially looked at all our international operations especially over the last year we have done a fair bit of clean up."
"We have had to shut down a few companies, restructure others and that is what we have seen over the last five quarters starting from Q4 fiscal 2020 which was the highest, SsangYong Motor was the big part of that and as we exited SsangYong and a number of other actions we see this coming down very significantly.”
He added, “Current Rs 840 crore is result of restructuring few of our operations. We have taken our exposure to SsangYong down further so currently we have reduced our exposure to SsangYong while another Rs 440 crore or so and we are left with Rs 220 crore which is something that we feel we will recover as part of the liquidation process.”
For full management commentary, watch the video.