Mahindra Q4 profit jumps 14.4% on better UV, tractor sales

Consolidated total income for the quarter rose 16% while operating margins rose to 12.5%

Mahindra & Mahindra reported a 14.4% rise in consolidated net profit at Rs 668 crore for the quarter to March driven by better margin and higher sales and sounded bullish about tractor sales .

The auto maker was, however, cautious on passenger cars given the gathering cloud on the diesel vehicles front.

Consolidated total income for the quarter rose 16% to Rs 11,669 crore, while operating margins rose 130 basis points to 12.5% despite the withdrawal of tax sops for its Haridwar plant.

For the full year ended March 2016, total income inched up a tad over 7% to Rs 43,918 crore, while net profit declined to Rs 3,298 crore, from Rs 3,423 crore in 2014-15.

While passenger vehicle sales as a whole grew 2.5% lead by a 15.2% rise in sales of utility vehicles on back of new launches and urban demand in the reporting quarter, Mahindra reported its best-ever sales in 16 quarters during the reporting period with its utility vehicles sales rising 14% and tractor volume jumping 12%, leading to an over 13% spike in revenue.

During the year, the company rolled out nine models, including two brand new models-the KUV100 and the TUV300 and company chief executive Praveen Shah ruled out any major launches in FY2017 except some variant launches.

Better sales numbers for the full year is despite an 8.8% fall in sales of passenger car segment and 6.8% in tractor sales during the first half of the year, company's group chief financial officer VS Parathasarathy said, adding the company ended the year yanking up more market share in both the categories— 41% in trackers and 39.2% in utility vehicles.

"Going forward, we expect to clock 10% growth in the tractor sales, given the positive monsoon forecast, while given the widening ban on the high end diesel vehicles, we don't see any reason to revise the industry growth estimate, as the issue is a matter of grave concern for the industry," Group Executive Director and President Pawan Goenka told reporters while announcing the earnings for the quarter and the full year 2015-16.