M&M net profit up 40% at Rs 562 cr

Utility and tractor-making market leader Mahindra & Mahindra today announced a net profit of Rs 562 crore for the quarter ended June 30, 2010, beating street estimates of financial analysts by a comfortable margin.

The company logged growth of 40 per cent in net profit against Rs 400 crore in the same quarter a year earlier. The growth came on the back of improved demand for its product range aided by tight cost control measures.

Pawan Goenka, president (automotive and farm equipment sector), M&M, said, "During the quarter, prices of raw materials increased significantly. However, we see a downward trend in prices; in fact, there has been a softening already."

"We are now looking to import casting parts and tyres to fill the gap in supply. While eight-10 per cent of production is lost in vehicles, a further seven per cent is lost in tractors", added Goenka.

M&M's board has sought more time for finalising the bid on the troubled Korean sport utility vehicle maker SsangYong Motor, stating more information about the target company is expected to flow in the coming days. M&M will take a decision about the bid closer to the final date of submission, which is August 10.

Shares of the company on the Bombay Stock Exchange closed 0.66 per cent higher at Rs 643.95 after, touching a 52-week high of Rs 655.70.