Mahindra Auto and tractor exports up in March 2015

Reacting to today’s RBI Credit Policy, V S Parthasarathy, Group CFO, Group CIO and President (Group Finance and M&A) Member of the Group Executive Board, Mahindra says RBI Governor has not delivered a rate cut as was widely expected. He has however stressed on the need for banks to pass on benefit of previous reductions to borrowers. RBI has indicated they encourage banks to move towards a marginal cost-based determination of Base Rate regime. Parthasarathy hopes this evolves quickly to benefit borrowers, and improve credit demand. Having said that, the bank is known to act outside of policy windows. He hopes further rate actions will be initiated in appropriate time.

V S Parthasarathy, Group CFO
V S Parthasarathy, Group CFO

RBI intends to allow corporates to issue INR bonds abroad under ECB, a welcome move that effectively addressee pricing and currency risks, apart from opening a window for INR denominated tradeable instruments in international financial markets.

Mahindra auto sales for March 2015 stood at 45,212 units (PY 51,636 units) equating to 12 pct decline. Passenger vehicles segment (UVs+Verito) reports 21,030 units sold (PY 23,433 units) equating to 10 pct decline. Domestic sales stood at 41,193 units (PY 48,490 units) down 15 pct. In March 2015, the Truck and Bus division sold 1,076 units (PY 1,103 units) down 2 pct. Exports stood at 4,019 units (PY 3146 units) up 28 pct.

Pravin Shah, Chief Executive, Automotive Division, Mahindra says factors such as expectation of normal monsoon, settling down of petrol and diesel prices and likely softening of interest rates fosters expectations that the auto industry would perform better, in FY2015-16. Impact in segments such as the HCV points to a recovery path. Mahindra is particularly happy with performance in HCV segment and exports with growth reported at 22 and 28 pct, respectively. Mahindra expects to perform better and has planned new launches.

Mahindra Farm Equipment Sector (FES) domestic sales in March 2015 stood at 10,392 units (PY 16,571 ­­units) equating to 37 pct decline. Total tractor sales (domestic + exports) stood at 12,254 units (PY 17,673 units), down 31 pct. Exports for the month stood at 1,862 ­­­­units (PY 1102 units), up 69 pct.

Rajesh Jejurikar, President and Chief Executive, Farm Equipment and Two Wheeler Division, Mahindra says unseasonal rains and hailstorms adversely affected market sentiment. Dealer inventory was adjusted in Q4 FY2-14-15 to align with market conditions. Mahindra exports in March were its highest ever.

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