M&M Q3 net profit soars 78% at Rs 735 cr

Auto major Mahindra & Mahindra (M&M) today reported 77.59% increase in its net profit for the quarter ended December 31, 2010, at Rs 734.68 crore on account of robust demand and various cost saving measures.

The company had posted a net profit of Rs 413.70 crore in the corresponding period previous year, M&M said in a filing to the Bombay Stock Exchange (BSE).

The total income during the third quarter of this fiscal also surged by 36.11% to Rs 6,121.09 crore from Rs 4,497.12 crore in the year-ago period, it added.

"The significant growth in the profit of the company, despite the relentless increase in material costs is due to a good volume performance by both vehicles and tractors, tight control on expenses and prudent financial management resulting in lower interest costs," M&M said.

During the quarter, the company sold 56,211 units of utility vehicles in the domestic market, enjoying 62.2% share in the segment.

The domestic sales of 'Mahindra Swaraj' tractors grew to 55,649 units from 41,074 units in the same quarter last fiscal, the company said.

While vehicle exports jumped by 50.71% to 5,020 units, tractors exports climbed by 10.09% to 3,120 units, it added.

Commenting on the outlook, M&M said, "While the demand for the company's products remains robust, the recent hardening in the prices of commodities and oil causes a degree of concern."

"The measures adopted by the Reserve Bank to combat inflation will necessarily result in tighter liquidity and further possibility of interest costs moving upwards."

The company, however, said the overall outlook for the future remains positive.

Reacting to the result, the shares of the company were trading 4.67% up at Rs 658 a piece during late- afternoon trade on the BSE.