Utility cars drive M&M net 26%

Mahindra & Mahindra, India's largest utility vehicle and tractor maker, posted a 26 per cent growth in net profit for the quarter ended December, lifted by strong growth in demand for utility vehicles and pick-ups.

The Mumbai-based company posted Rs 836 crore net profit for the quarter compared with Rs 662 crore in the corresponding quarter a year ago.

The M&M stock, however, closed 1.4 per cent down on the Bombay Stock Exchange at Rs 883 on account of margin decline, fall in demand for tractors in some pockets and fall in exports.

Ebitda margins declined to 11 per cent for the quarter against 12 per cent in the corresponding quarter last year. Big export markets such as Bangladesh, Sri Lanka and Bhutan have shown a decline in demand.

In utility cars, the company saw a growth of 36 per cent during the quarter at 70,483 units. Tractor sales remained flat under the Mahindra and Swaraj brands at 62,522 units against 62,342 tractors in the corresponding period last year.

Speaking to analysts Pawan Goenka, president (automotive and farm equipment sectors), said, "The ability to pass on the material cost rise to consumers has been very good. Both UV and pick-ups have done very well.”