Total revenue for Mahindra's fiscal year 2020 was reported at $6.8 billion, down 15.2% from $8.1 billion in fiscal year 2019. Total farm equipment revenue for the year came in at $2.3 billion, an 8.7% decline from the $2.5 billion reported in fiscal year 2019.
Mahindra reported an operating profit of $388.7 million, down 64.5% from $1.1 billion in the previous fiscal year. The company reported a total loss of $48.3 million, compared to a profit of $904.4 million in fiscal year 2019.
Mahindra’s Farm Equipment Sector recorded total sales of 301,915 tractors (domestic + export) in fiscal year 2020 against 330,436 tractors sold in the previous year, registering a decline of 8.6%. This includes 2,988 tractors sold under the Trakstar brand, which is the third brand of Mahindra under the subsidiary Gromax Agri Equipment Ltd.
In the domestic market, Mahindra sold 291,901 tractors (including Gromax Agri Equipment Ltd.), as compared to 316,742 tractors in the previous year, recording a decline of 7.8%. However, Mahindra increased its market share by 0.9% and continued its market leadership for the 37th consecutive year.
For the year under review, Mahindra exported 9,956 tractors down 26.6% year-over-year.
Spare parts net sales for the year stood at $108 million (including exports of $6.4 million) in financial year 2020 as compared to $102.5 million (including exports of $7.1 million) in the financial year 2019, registering a growth of 5.3%.
For the year under review, the tractor industry in India recorded total sales of 709,002 tractors, a decline of 9.9%. This was the first year of overall decline in the tractor industry in India after 3 years of consecutive growth. The sharp decline in the tractor industry in financial year 2020 can be primarily attributed to the slowdown in the overall economy, impacting the rural and agri sector both in terms of income and sentiments.
Impact of COVID-19
The financial year 2020 ended with the COVID-19 pandemic disrupting the global economy and supply chains. The rampant spread of COVID-19 outbreak, across borders and geographies, has severely impacted almost the whole world and triggered significant downside risks to the overall global economic outlook.
Fiscal year 2021 began with a lockdown, with almost zero economic activity in India, which took strict measures to contain the spread and intensity of the pandemic. With an extended lockdown in the first quarter of fiscal year 2021, the impact on GDP is expected to be significant with the risk of negative growth for fiscal year 2021, an all-time low in many years.
From the company's perspective, it is estimated that the quantum of loss due to COVID-19 lockdown for March 2020 is around 23,400 vehicles and 14,700 tractors, while for the first quarter of fiscal year 2021 is around 87,000 vehicles and around 30,000 tractors.