Mahindra & Mahindra has reported a standalone net profit of ₹896.88 crore for the quarter ended March 31, a marginal increase from ₹889.19 crore in the corresponding period last year.

Net income was up by nearly 5 per cent to ₹11,000.7 crore (₹10,486.5 crore) for the quarter. The M&M scrip closed at ₹1,230.50 on the BSE on Friday, up 4.43 per cent from the previous close.

Tractor sales, which rose 12 per cent during the quarter to 1.39 lakh units, were the major growth-driver.

Terming this a ‘reasonably good financial performance’, Pawan Goenka, Executive Director and President (Automotive, Farm Equipment and Two-Wheeler Sectors), said at a press meet the auto industry was looking at a growth of 8-10 per cent this fiscal. “April was not very good, but things will pick up.”

High expectations

From M&M’s point of view, some positives are already emerging like a strong rupee, political stability and good prospects in rural India. The new BJP Government has also prioritised investments in infrastructure and is keen on fast-tracking implementation of the Goods and Services Tax.

Goenka said the industry has high expectations from the Government and this optimism must be followed by action as it will help revive sentiment. While the auto sector was not looking for any specific package, he believed the excise duty cuts announced in February’s interim Budget should continue beyond the stipulated deadline of June 30. This was keeping in mind the state of the economy and the dire need to revive demand.

Goenka reiterated that the company’s investments and new product pipeline were on schedule. M&M had already announced ₹10,000 crore to be spent over three years, which includes capital expenditure of ₹7,500 crore. A part of this will go towards the initial investment for a new plant whose location is expected to be finalised shortly. It will increase the overall capacity by 2.5 lakh units.

M&M will also launch two compact SUVs next calendar year, keeping in mind the competitive pressure in this product category led by the Renault Duster. While its larger SUVs such as Bolero, Scorpio and XUV 500 have been doing well with combined monthly sales of nearly 17,000 units, the compact SUV space has seen brisker growth. The company has a 43 per cent market share in SUVs and nearly 41 per cent in tractors.

Related Topics