Mahindra & Mahindra (M&M) on Friday reported a first-quarter consolidated loss of ₹98 crore and said it had dropped plans to invest $500 million in the U.S. with its unit Mahindra Automotive North America (MANA) exiting a race to supply small delivery trucks to the United States Postal Service (USPS) — a deal estimated at $6.3 billion.
“MANA, among four shortlisted players, has decided not to bid considering prevailing conditions,” said Anish Saha, deputy MD and Group CFO, announcing the results. “The $500 million investment by us in MANA was subject to us winning the USPS bid. We chose not to participate in that bid so the investment plan has been cancelled. Whatever had been invested so far for the preparation of the bid was a very small amount and has been written off,” he said.
Since the outbreak of Covid-19, M&M has been conserving cash and pulling out of loss-making international businesses. It has decided to appraise businesses that are unable to provide 18% return on equity investment.
The firm has sought shareholders’ nod to lower stake in South Korean unit SsangYong Motor Co. to below 50%. The plan is to rope in a strategic investor as Mahindra has decided not to invest any more in the firm. It is also seeking a strategic investor for Mahindra Electric. “We are engaged with multiple parties to invest in Mahindra Electric,” said Dr. Pawan Goenka, MD, M&M.
The company on Friday reported group consolidated net loss of ₹98 crore in Q1 compared with a net profit of ₹914 crore a year earlier. Income from operations was down 37% to ₹16,520 crore.
M&M reported standalone net profit of ₹112 crore in Q1 compared with ₹2,314 crore. Revenue from operations dipped to ₹5,602 crore from ₹12,923 crore.