Riding on an increase in tractor sales, Mahindra & Mahindra (M&M) beat the forecasts and industry odds to post a 29 per cent jump in its first-quarter net profit.
On a standalone basis, the country’s biggest utility vehicle maker posted a net profit of Rs 937.9 crore against Rs 725.6 crore during the same quarter a year ago.
Total income rose to Rs 10,186.75 crore (Rs 9,427.24 crore) during the quarter under review.
Addressing the media, Pawan Goenka, President (automotive and farm equipment sectors) at M&M, said: “We have exceeded expectations, given the fact that the industry has been going through a slow and lukewarm phase.”
M&M’s tractor sales rose 26.1 per cent over the comparable quarter to 71,696 units.
Tractor revenues were “significantly higher than what we expected”, he said, adding that the segment benefited from the better spread of the monsoons.
On the operating front, M&M’s EBITDA margins improved by 100 basis points on a year-on-year basis to 12.8 per cent.
“This was marginally better than our expectation of 12.5 per cent,” said Yaresh Kothari, sector analyst at Angel Broking, who expected M&M to post a net profit of Rs 850 crore in the first quarter.
During the quarter, M&M, together with its wholly-owned subsidiary, Mahindra Vehicle Manufacturers Ltd (MVML), posted a 16.9 per cent increase in net profit to Rs 909.7 crore (Rs 778.5 crore). Gross revenues and other income increased to Rs 10,801.5 crore (Rs 10,003.9 crore).
Separately, M&M Chairman Anand Mahindra told shareholders that the group would invest Rs 10,000 crore in the next three years.
Some of that investment will go towards a new auto plant.
“…let me put a stake in the sand and clearly state that we are bullish about our future. And we will continue to invest in that future,” said Mahindra, in his first address as M&M’s Chairman.
Ssangyong Motor
During the quarter, Ssangyong Motor, M&M’s South Korean subsidiary, posted a net profit of 6.2 billion won (Rs 31 crore), its first quarterly profit in six years.
Ssangyong, which was acquired by M&M in 2010, has also broken even for the first time since its acquisition, Mahindra added.
On Tuesday, M&M’s shares rose 1.25 per cent to close at Rs 870.90 on the BSE.
rajesh.kurup@thehindu.co.in