Hurt by flat growth of its tractor segment, auto major Mahindra and Mahindra Limited posted a 4.3 per cent drop in its second quarter standalone net profit.
In the July to September period, the Mumbai-based company posted a net profit of Rs 947 crore against Rs 990 crore, a year ago.
The auto maker posted a 7 per cent rise in its standalone total income at Rs 9,544 crore.
Total expenses rose to Rs 8,783 crore during the quarter from Rs 7,982 crore, a year ago.
Pawan Goenka, Executive Director & President – Automotive Farm Equipment Sectors, M&M said, “Auto industry is on the recovery path. However, the tractor segment continues to be flat.”
The company attributed delayed and below average monsoon in some parts of the country and also crop damage caused by cyclones for the flat growth in the domestic tractor industry.
The company said that the harvest will be negatively impacted by delayed and deficient monsoon, thereby impacting the farm equipment segment.
The truck industry has turned around, Goenka added and said that six consecutive months of growth for the industry cannot be an “accident.”
On a combined basis, however, its net profit was up 1.7 per cent.
The figures include the combined performance of Mahindra and Mahindra Limited and Mahindra Vehicle Manufacturers Limited.
The auto-maker posted a combined net profit of Rs 974.1 crore during the three month period ended September 30, 2014 against Rs 957.4 crore, a year ago.
Outlook
As far as the four wheeler segment is concerned, Goenka added, “things are looking up, but up until now the overall growth in the segment has been less than 5 per cent. So, it is highly unlikely that we will cross a 10 per cent growth in the full year.”
Across the various types of vehicles in the four wheeler segment, he said that a very uneven kind of a growth is taking place. “Small commercial vehicles are de-growing and trucks are growing…it is a very complex web,” he said.
Shares of the Mumbai-based company closed at Rs 1303.40, up 1.23 per cent on the BSE.