The Hindu Business Line : M&M net profit surges to Rs 401 cr

Dr Pawan Goenka (right), President, Automotive Sector, Mahindra and Mahindra Ltd, and Mr Bharat Doshi, Executive Director and Group CFO, at a press conference in Mumbai on Thursday.

Our Bureau

Mumbai, July 30 An impressive growth in volumes, amalgamation of Punjab Tractors and cost control measures helped Mahindra & Mahindra report a standalone net profit of Rs 401 crore for the quarter ending June 30, 2009, a huge jump from Rs 159 crore in the same period last year. Total income grew 28 per cent to Rs 4,243 crore (Rs 3,302 crore).

Mr Bharat Doshi, Chief Financial Officer, said that the good results were on the back of the highest quarterly sales volume in the history of the company. The operating margin nearly doubled to 14.35 per cent from 7.75 per cent.

Segment break-up

In the utility vehicle segment, M&M recorded volume growth of 28.5 per cent at 48,720 units and grew its market share to 65 per cent while the industry grew just 1.6 per cent to 75,206 vehicles.

The tractor division clocked a combined volume of 42,130 units. While the Mahindra branded tractors grew 8.3 per cent to 30,502 units, Swaraj Tractors (produced by Punjab Tractors which was acquired by M&M) clocked 11,628 units, a growth of 32 per cent.

The fall in raw material prices also helped the company improve margins. Although total expenditure grew 20 per cent to Rs 3,722 crore, it was still proportionately less as against the growth in volume sales and revenue.

Xylo momentum

“The volume growth in utility vehicles mainly came from the Xylo which sold 7,500 units. We have many more products in the pipeline including a sport utility vehicle (SUV), a four-wheeler truck and a bus. Including the investment in Chakan plant, our total capital expenditure from fiscal 2008-09 to fiscal 2011-12 will be Rs 4,500 crore,” said Mr Pawan Goenka, President, Automotive Sector. He said the company would begin selling pick-up trucks in the US by early next year.

“The second quarter is important for the tractor segment, thanks to the festive season. However, sales will still depend on the monsoons. We expect a 6-10 per cent growth during the quarter,” said Mr Anjani Kumar Chaudhari, President, Farm Equipment Sector.