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New Delhi: Mahindra and Mahindra India Ltd (M&M), one of the country’s largest vehicle manufacturers, reported a year-on-year increase in net profit of 934 crore for the June quarter.

This has come as a result of improvement in sales of tractors and passenger vehicles and the low base effect in the corresponding quarter when production and sales were impacted by the stringent nationwide lockdown imposed to contain the covid pandemic. The company had reported a net profit of just 39 crore in the year-ago period.

Sustained increase in prices of commodities such as steel and other precious metals continues to impact the company’s operating performance and the management expects the shortage of semiconductors to continue to severely impact production operations.

The Mumbai-based vehicle maker’s performance dropped sharply on a sequential basis because of the explosive increase in covid infections during the second wave. M&M had to stop production and its dealerships also remained shut for a large part of the quarter as states imposed strict lockdowns to contain covid.

M&M had witnessed a sharp recovery in wholesale and retail sales of tractors and passenger vehicles from March to July FY21 on the back of a gradual recovery in the rural economy and increased preference for personal mobility. High demand and supply chain constraints resulted in a waiting period for some of the company’s offerings going beyond four months.

Revenue from operations during the quarter increased by 110% to 11,763 crore compared to just 5,589 crore in the year-ago period as wholesales of tractors skyrocketed to 85,858 units from 26,619 units. The dispatches of PVs also increased by 52% from 65,195 units to 99,127 units.

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