Indian automaker Mahindra posts quarterly profit vs year-ago loss
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BENGALURU -Mahindra and Mahindra Ltd posted a quarterly profit on Friday as demand for its passenger vehicles and tractors picked up, sending shares of the Indian automaker over 2% higher.
Car makers including Mahindra saw a strong recovery in demand for passenger vehicles in the previous quarter as lockdowns eased and people avoided public transport due to the pandemic.
Profit after tax was 484.4 million rupees ($6.69 million) for the fourth quarter ended March 31, compared to a loss of 25.02 billion rupees a year ago when it took a charge related to its South Korean unit SsangYong Motor Co Ltd, Mahindra said.
Revenue from the auto sector rose 43% despite supply constraints hitting sales and production.
Mahindra has been reviewing its business to retain only those that make money or can be profitable, and as part of that it took a one-time hit in 2020 related to SsangYong Motor.
The COVID-19 pandemic and supply chain disruptions due to a global chip crunch had hurt the automaker's performance last year, and now pose a threat to its recovery.
On a consolidated basis, Mahindra booked a one-time loss of 4.85 billion rupees during the quarter due to the discontinuation of SsangYong operations.
Bigger rival Tata Motors, which reported results earlier this month, warned of tough times ahead amid a global chip shortage, rising commodity prices and surging COVID-19 cases in India.
Shares of Mahindra and Mahindra, which were more than 1% lower before results, reversed their course to rise as much as 2.3% to 848 rupees.
