The Hindu Business Line : M&M Q2 net dips 26%

Despite higher sales, Mahindra & Mahindra has posted a 26 per cent drop in net profit at Rs 285.9 crore for the second quarter ended September 30 as against Rs 386.5 crore in the corresponding period last year.

Mr Uday Phadke, President-finance, legal and financial services sector, Mahindra & Mahindra, said that tractor sales have been low in the said quarter; capital expenditure on the organic growth of the company that had been earlier announced and envisaged for the current period is one of the contributing factors to the drop in net profit.

Furthermore, interest and depreciation cost has gone high due to increase in capital expenditure, he added.

While sales rose to Rs 3170.39 crore from Rs 2817.21 crore, total expenses increased to Rs 2474.69 crore from Rs 2171.03 crore.

The gross revenues and other income for the second quarter at Rs 3239.5 crore registered a growth of 12.1 per cent over Rs 2890.1 crore for the corresponding period in the previous year. Profit before exceptional items and taxation for the current quarter is Rs 388.6 crore (Rs 407.9 crore).

Utility vehicle sales

In the second quarter, utility vehicle sales witnessed a growth of 19.9 per cent compared to an industry growth of 4.1 per cent. The company sold 35,309 utility vehicles against 29,449 units in the corresponding period previous year. It now has a utility vehicle market share of 52.6 per cent (45.7 per cent).

Scorpio sales have increased by 8.3 per cent in the second quarter against the corresponding period last year.

The Scorpio Getaway has been launched in select metros, while the new Bolero that was launched in March 2007 grew in volumes by 26.5 per cent in the second quarter compared to the same quarter last year. The company’s exports at 2,760 units remain the same for the second quarter.

The domestic tractor industry continued its declining trend in second quarter, with sales 10.7 per cent lower than that of last year. However, the company’s domestic tractor sales declined by 5.4 per cent in the same period. It sold 20,633 units in the said quarter against 21,801 tractors in the second quarter last year. Its market share, however, has improved to 30.6 per cent in the current quarter against 28.9 per cent.

Tractor exports during the current quarter at 1,639 units were slightly lower than 1,764 units exported in the second quarter last year.