Mahindra & Mahindra’s (M&M) net profit for the quarter ended September 30, 2011 have slipped three per cent to Rs 737 crore on the back of adverse rupee movement.
“The company could maintain its profits despite the relentless increase in material costs due to a good volume performance by both vehicles and tractors in a difficult market and a tight control on expenses,” the company said.
Net sales in the quarter, which include that of its fully-owned subsidiary Mahindra Vehicle Manufacturers, were up 38 per cent at Rs 7,307 crore.
M&M sold 14 per cent more passenger vehicles during the period at 47,523 units and maintained a market share of 54 per cent. Exports rose 89 per cent to 7,239 vehicles.
The company said that the profits could have been higher, but for a net loss of Rs 32 crore suffered by it on account of the “precipitous fall in the value of the rupee against the US dollar towards the end of the quarter and the consequent revaluation of its External Commercial Borrowings repayable largely in the year 2016”.
On the outlook for the second half of the fiscal, it said: “Faced with a steadily deteriorating global macro environment, volatile capital flows and exchange rates, persistently high inflation, rising interest rates and continued policy and regulatory uncertainty, business confidence has weakened considerably this year. Investment outlays, as a consequence are witnessing a significant moderation, which does not bode well for future growth. On balance, our economic outlook for the current year is cautious.”
M&M shares on the BSE were trading down 5.14 per cent at Rs 795.30.