Indian automaker Mahindra & Mahindra enjoys strong first quarter as COVID restrictions ease

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An employee walks past a Mahindra TUV300 car at a showroom in Mumbai, India August 30, 2016. Picture taken August 30, 2016. REUTERS/Danish Siddiqui/

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NEW DELHI, Aug 5 (Reuters) – Mahindra and Mahindra Ltd (MAHM.NS) reported a sharp rise in first-quarter net profit on Friday on improved demand for the Indian automaker’s passenger vehicles and tractors.

The company, owned by Indian billionaire Anand Mahindra, said it sold 149,803 vehicles in the quarter, up 74%, while its tractor sales jumped 18% from a year ago, so restrictions related to the COVID-19 pandemic have eased.

With more than 273,000 bookings, demand for the automotive product portfolio remains strong, said Rajesh Jejurikar, executive director of the Mumbai-based company.

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While demand for cars has been strong, automakers also say they are seeing an easing in semiconductor shortages seen just after the pandemic. Mahindra was hit hard by a shortage of chips, limiting its supplies and resulting in a backlog last year. Read more

The company reported consolidated net profit of 21.96 billion rupees ($277.54 million) for the three months ended June 30, up from 4.24 billion a year earlier.

Mahindra’s operating revenue increased by 48% in the quarter to Rs 284.12 billion.

However, its operating margin was 11.9%, 200 basis points lower than a year ago.

($1 = 79.1250 Indian rupees)

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Reporting by Aditi Shah; edited by Jason Neely and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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