M&M net surges 89 per cent

Mahindra & Mahindra, the country’s largest utility vehicle and tractor maker, has posted an 89 per cent increase in net profit at Rs 418 crore for the quarter-ended March 31, 2009, compared with Rs 221 crore in the year-ago period. The rise was largely due to the additional revenue brought in by Punjab Tractors (PTL) and through the sale of shares in Swaraj Mazda by PTL.

Demand for the Xylo, a recently launched multi-utility vehicle, also boosted overall sales for the company. Sale of utility vehicles went up by 12 per cent to 48,088 units during the quarter as compared to 42,999 units. Sales of M&M branded tractors in the domestic market, however, fell by 4.5 per cent to 19,426 units.

M&M wrote back Rs 166 crore in the same quarter because of the change in Accounting Standard 11 (AS 11) regarding foreign exchange provisions. Excluding one-time gains and write backs, profit for the company would have been Rs 279 crore as against Rs 208 crore, its senior executive said today.

Net sales rose 15 per cent to Rs 3,619 crore for the reporting quarter as against Rs 3,159 crore posted earlier. During the quarter, the company reported a profit after tax of Rs 34 crore on sale of shares of Swaraj Mazda. Despite uncertainty prevailing over the next few quarters, the company will spend about Rs 2,000 crore as part of the capital expenditure (capex) plan with a large portion of it going to M&M's latest plant in Chakan.