The total tractor sales are down 1% year-on-year (YoY) from 24,704 units sold in May 2019. Domestic sales rose 2% to 24,017 units, while exports contracted 72% to 324 units in May 2020 over the corresponding period last year.
Hemant Sikka, president - FES, M&M, said, "The timely relaxation of the lockdown for the Agricultural sector helped ensure the speedy recovery of tractor demand during May. In the near term, farmer sentiment is likely to remain positive due to several developments including robust Rabi crop production, higher procurement, good price realizations and the forecast of a normal monsoon that bodes well for a good Kharif crop. All these augur well for tractor demand going forward."
M&M's Auto Sector sold 9,560 vehicles in May 2020, lower by 79% as compared to 45,421 vehicles sold in May 2019.
Total domestic sales were at 9076 units (down 79% YoY) and total exports stood at 484 units (down 80% YoY) during the month.
Veejay Nakra, chief executive officer, automotive division, M&M, said, "Our performance during May has been muted, due to the challenges the industry is facing. We have opened 70% of our dealerships and retail sales have begun. We are seeing initial traction for our small commercial vehicles and SUV brands such as the Bolero and Scorpio. As new lockdown norms are being announced we are hopeful of demand gaining traction in the coming months."
Meanwhile, after market hours on Friday (29 May 2020), M&M said that CRISIL had assigned 'CRISIL AAA/Stable' rating on the Rs 500 crore non-convertible debenture (NCD) programme of the company.
CRISIL said that the ratings continue to reflect M&M's leadership in the Indian tractor industry and healthy market position in light commercial vehicles (LCVs). The ratings also factor in a strong financial risk profile, supported by a robust balance sheet with low leverage and high financial flexibility. These strengths are partially offset by exposure to cyclicality inherent in the farm equipment (tractor) and automotive (auto) segments, exposure to risks pertaining to acquisitions and investments in subsidiaries/joint ventures (JVs), and decline in market share in the utility vehicle (UV) space over the last few years.
Mahindra & Mahindra's business is currently diversified across farm equipment, auto and automotive components, real estate, hospitality, information technology, defence and aerospace and financial services.