M&M result takeaways

Auto division help M&M beat street expectation

Mahindra & Mahindra has surprised the market by posting a net profit growth of 22.3 per cent at Rs 901.8 crore as compared to market expectation of Rs 802 crore. The difference was on account of better operating margin by the company which stood at 13.8 per cent for the September quarter as compared to market expectation of 11.2 per cent.

Following are the key takeaways from the company’s September 2012 results

• Net sales of the company stood at Rs 9,659.2 crore as compared to market expectation of Rs 9,600 crore. M&M had posted sales of Rs 7,244 crore for September 2011 and Rs 9,247 crore in June 2012.
• Growth was solely on account of automotive segment which posted a sales growth from Rs 4,516.40 crore to Rs 7,149.84 crore. In the June quarter the company posted net sales of Rs 6,278.65 crore for the division.
• Earnings before interest and tax for automotive segment improved from Rs 448.09 crore to Rs 671.77 crore. For June quarter EBIT stood at Rs 552.76 crore.
• Farm equipment division was a drag on the company’s number falling from Rs 2,823 crore in September 2011 to Rs 2,653 crore in September 2012 and Rs 3078 crore in June 2012.
• Earnings before interest and tax from the division were lower at Rs 392.05 crore as compared to Rs 432.51 crore in September 2011 and Rs 482.42 crore.
• Lower than normal rainfall is cited by the company for poor performance of the tractor division.
• The company sold 47,065 tractors as compared to 54,585 in the previous year.
• M&M has sold 62,751 passenger utility vehicles in September 2012, a growth of 32 per cent over previous year.
• Exports grew by 43 per cent at 10349 vehicles
• The company has launched Quanto in the quarter and has a booking of 5000 vehicles in the first three weeks.