Home-grown auto major Mahindra & Mahindra has posted a 19.8 per cent fall in quarterly profit impacted by slower sales growth in passenger vehicles and a one-time charge due to transition to GST.
Profit after tax was ₹766 crore in the first quarter ended June 30, compared with ₹955 crore in the year-ago quarter, the company said. Excluding the impact of the Goods and Services Tax, M&M earned a profit of ₹860 crore.
Revenue from operations during the first quarter of 2017-18 stood at ₹12,336 crore, up 3.3 per cent from ₹11,943 crore in the year-ago period, M&M said.
“This was an eventful quarter to say the least. It started with the BS-III (phasing out of vehicles complying with BS-III emission norms), which was nothing less than a bombshell, and it was followed by the GST transition. The industry though has managed these disruptions quite well,” said Pawan Goenka, Managing Director.
“Due to the unavailability of input credit for certain taxes paid, as well as due to tractors being exempt from excise duty in the earlier regime, we made provision for dealer support in respect of duty paid goods lying with dealers amounting to ₹144 crore,” Goenka said.
The company’s vehicle sales were at 1,12,293 units during the first quarter against 1,10,959 units in the year-ago quarter. It sold 81,270 tractor units during the period under review.
Except for the light commercial vehicle segment, which grew by 20.7 per cent, all other segments saw a decline in unit terms.
The biggest decline was in the Vans & Cars segment, which fell 21.7 per cent. The biggest segment in terms of volume, M&M’s utility vehicles fell 5.1 per cent.
The growth, however, was good in the farm equipment segment, which grew 14.8 per cent in revenue and 9.2 per cent in terms of profits. Volumes grew 13.2 per cent in the segment.
Exports fell 56 per cent in the quarter to 4,676 units owing to macro economic issues in Sri Lanka and Nepal, the company said.
Passenger vehicles sales were adversely impacted in anticipation of a price reduction in the new tax regime and reported a nominal growth of 4.4 per cent in revenue terms, the company said.
The company’s scrip closed at ₹1418.30, up 0.10 per cent over the previous close on the BSE.