Auto major Mahindra & Mahindra (M&M) on Monday said the company has to focus on cash conservation and tighten capital allocation due to the COVID-19 situation after it reported a consolidated loss of Rs 3,255.02 crore for the January-March quarter.
The company also said it may consider giving up control of its loss-making Korean arm SsangYong Motor Company besides selling its electric two-wheeler company in the US.
In an interview to CNBC-TV18, Pawan Goenka, managing director, said, "The board took a decision that we need to be much tighter on capital allocation and prioritise where we want to put our money."
Goenka said the company is looking at all the subsidiaries right now to see whether they will be turning around profitable in the next two years, "Everything is under examination and we would be announcing things as we make some decisions."
Speaking about Peugeot Motorcycles, he said, "It was an unfortunate case of COVID-19. As per the plan, it could have been profitable during this year. However, because of COVID-19, our China factories are down for quite some time, we lost a full peak season of Europe. Now we are examining how long will it take to get back on track. Then we will take a decision this year on what will be the future for Peugeot."
Goenka said Mahindra Electric turned EBITDA positive in FY21 and the company is on the way to becoming profit positive or cash-flow positive.
The company had a very strong balance sheet going into COVID-19 and a fairly strong cash position, more than Rs 10,000 crore of cash on hand right now, he further mentioned.
He said company's Our primary objective is to find a third party investor in Korean manufacturer SsangYong as the it needs more cash infusion.