Utility vehicles major Mahindra & Mahindra (M&M) has posted a 3.4 per cent fall in net profit at ₹852 crore in the first quarter ended June 30, impacted by the overall turmoil in the automobile sector. The company had posted a net profit of ₹882 crore for the same quarter of the previous financial year.
M&M’s net profit for the quarter was marginally lower compared with ₹854 crore (after adjusting for a one-time gain) recorded during the year-ago quarter. The company’s gross revenues and other income fell to ₹10,629 crore from ₹10,863 crore posted during the same quarter of the previous year.
“The monsoon has done reasonably well and as a result many of the businesses have performed well…. The monsoon situation is not all that bad, but we will have to wait to see the results,” said Executive Director Pawan Goenka.
The net profit of M&M, together with that of Mahindra Vehicle Manufacturers Ltd (MVML), was marginally lower at ₹831 crore against the adjusted ₹834 crore in the corresponding quarter of the previous year. MVML was set up as a wholly-owned subsidiary for sourcing of products.
“We are waiting for big launches and that will drive our volumes,” Goenka added.
The company, which has plans to launch nine new products, including refreshes every year, is readying to launch another five products this year.
“This quarter, transportation sector showed good results and there has been growth everywhere, while M&M has grown better than the industry,” said M&M Chief Financial Officer VS Parthasarathy.
With the monsoon setting in on time, there is some positivity seen in the latter part of June 2015, the company said in a statement.
The Indian economy is gradually gaining momentum and stalled projects are coming back online, while new project announcements have picked up pace in the last couple of quarters.
“Capex trends, as a result, are far healthier today than they were a year ago which bodes well for future growth," it said, adding that M&M’s balance sheet remains healthy and “well buffered”.