Mahindra Electric'S Operating Revenue Nears Rs 450 Cr In FY22, Losses Shrink By 34%

Electric vehicles are the trend of the future, and Indian automakers like Mahindra, which has been experimenting with EVs for the past ten years, predict that by 2027, 20-30% of their portfolio would be made up of electric vehicles. Mahindra & Mahindra had created a new EV company, Ev Co, and raised $250 million from impact investor British International Investment (BII) at a valuation of $9.1 billion to expand its EV capabilities. Mahindra Electric's outstanding financial performance in the fiscal year that ends in March 2022 has been a major factor in the investment in the new company EV Co.

According to the company's annual financial statement filed with the Registrar of Companies, Mahindra Electric's revenue from operations increased 2.17X to Rs 443.88 crore in FY22 from Rs 204.41 crore in FY21 (RoC). the sale of electric vehicles is the major source of revenue, accounting for 67% of operating revenue that surged by 2.8X to Rs 296.8 crore in FY22 from Rs 106.39 crore the previous fiscal year (FY21).

The six vehicles in Mahindra Electric's range include two cars, the eVerito and E20Plus, as well as an e-rickshaw and e-auto (for both segments passenger and freight). Other significant sources of income, which climbed by 21.8% to Rs 83 crore in FY22, included product development and design fees. Mahindra Electric received Rs 63 crore from the sale of kits and replacement components in FY22.

For Mahindra Electric, the cost of materials represented the greatest cost component, accounting for 50% of total costs, which rose by 2.7X to Rs 256.5 crore in FY22 from Rs 93.8 crore the year before (FY21). Employee benefits costs are another significant cost component, rising by 25% to Rs 77.7 crore in FY22. Legal, professional, and warranty claim costs increased by 19% and 150%, respectively, to Rs 23.7 crore and Rs 20.74 crore. We are aware that the majority of warranty claim charges are associated with battery replacements made during the warranty period.

Mahindra Electric also spent an additional Rs 18.3 crore and Rs 14.74 crore on marketing, promotion, and transportation expenses, bringing the total expenditure up to Rs 517.7 crore in FY22 from Rs 319.8 crore in FY21. Mahindra Electric has successfully reduced losses by 34%, from Rs 107 crore in FY21 to Rs 70.5 crore in FY22, by strictly controlling expenses. Better ROCE and EBITDA margin were also a result of the influence of better unit economics. Mahindra Electric's operational revenue in FY22 was calculated at Rs 1.17 per unit.

Mahindra's expanding financial results coincide with the announcements and expansions of its EV ambitions by some of its biggest rivals, especially Maruti Suzuki and Tata Motors. It won't want to give up its lead in EVs too lightly because it presents Mahindra with the biggest future chance to increase its market share, especially now that its main brand is well-established among consumers.