The Hindu Business Line : Mahindra’s Q4 net rises 89% to Rs 418 cr

Showing resilience: Mr Anand Mahindra (right), Vice-Chairman & Managing Director, Mahindra & Mahindra, and Mr Bharat Doshi, Executive Director & Group CFO, announcing the company’s results in Mumbai on Thursday. —

Our Bureau

Mumbai, May 28 Mahindra & Mahindra has reported an 89 per cent growth in net profit at Rs 418 crore for the fourth quarter of 2008-09 as against Rs 221 crore in the same period last year. Net revenue was up 16 per cent to Rs 3,664 crore.

The growth in profit is a result of the company choosing to exercise an option under Accounting Standard 11 by which it is not required to provide for exchange differences arising from foreign currency loans. This helped it save Rs 166 crore while a gain of Rs 34 crore from sale of its stake in Swaraj Mazda only improved the bottomline.

Excluding the impact of exchange difference and other exceptional items, profit after tax for the quarter under review was Rs 279.5 crore against Rs 209 crore, a growth of 34 per cent, said a company statement.

During the January-March quarter, M&M reported sales growth despite the downward trend in the automobile market. “The results represent the resilience of the Mahindra group in turbulent times,” said Mr Anand Mahindra, Vice-Chairman and Managing Director, at a press conference here on Thursday.

When the domestic utility vehicle market fell 11 per cent, M&M grew 12 per cent by selling 48,088 units in the fourth quarter and gaining a market share of 63 per cent. This strong performance was thanks to the good sales of the Bolero and Xylo. Xylo bookings crossed the 15,000-unit mark in the first three months of its launch.

The company showed a marginal growth in tractor sales at 28,679 units, mainly because of the 17 per cent growth in sales of Swaraj Tractors at 9,253 units.

Dr Pawan Goenka, President, Auto Sector, Mahindra & Mahindra, said the company has a capital expenditure plan of Rs 5,000 crore for the next four years of which around Rs 2,000 crore has been earmarked for this fiscal, mainly in the new Chakan plant for commercial vehicles with ITEC of the US. A small four-wheeler, a truck (in the category of medium and heavy) and a premium sport-utility vehicle will roll out this year, he said.

The plant will have a capacity of three lakh units, of which 2.5 lakh units would be for M&M vehicles and the balance for Mahindra Navistar. Once the plant becomes fully operational, M&M’s production will be up to six lakh units annually.

Dr Goenka said the company would enter the US market by the end of this fiscal. “We have signed up with over 300 independent M&M dealers in the US for our Scorpio SUV and pickup options,” he said.

M&M’s shares were up nearly 2 per cent on the NSE on Thursday at Rs 637.

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