Mumbai: Tractor and utility vehicle market leader Mahindra & Mahindra (M&M) on Tuesday posted a 29 per cent rise in net profit for the quarter ended June, helped by higher sales of tractors and tighter control measures. The Mumbai-based company reported a standalone net profit of Rs 937 crore during the quarter against Rs 725 crore in the same quarter last year.
The fall in its passenger vehicle’s sales was made up by a buoyant demand for tractors. Helped by a favourable monsoon, M&M tractor sales rose 26 per cent in the first quarter at 71,696 units against 56,861 units in the same quarter last year.
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Pawan Goenka, president (automotive and farm equipment sectors), said, “The tractor segment was pegged to post a growth of five-six per cent for the year, but we now expect it to finish with a double digit growth. However, we have no clear sign of any turnaround in the passenger vehicle segment.”
Other factors such as no increase in commodity prices, lesser focus on discounting and marginal price hike during the quarter helped the company in improving margins. In line with other companies, M&M, too, got a boost from income received as dividend during the quarter. Together with the dividend, a total of Rs 164 crore was received under the head ‘other income’ against Rs 60 crore in the year-ago period. The company posted net sales of Rs 9,906 crore for the reporting quarter as compared to Rs 9,247 crore posted in the same quarter last year. Operating margins stood at 14.4 per cent as against 13.9 per cent.
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At the 67th annual general meeting, Anand Mahindra, the new chairman, said the company would invest Rs 10,000 crore in the next three years towards new product development and the setting up of a new plant. The company is making investments towards new products including a new compact sports utility vehicle, a new Scorpio, electric variants of some of the existing models and new models in partnership with its Korean subsidiary.
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