M&M net profit grows 12% on higher vehicles sales

Leading utility vehicle player Mahindra & Mahindra (M&M) today reported strong profit growth of 12.36 per cent and 14 per cent jump in gross revenues in the first quarter of the fiscal on higher vehicles sales.
On a standalone basis, the net profit increased by 12.36 per cent to Rs 955.21 crore for the first quarter ended June 30. It had posted a standalone net profit of Rs 850.09 crore in the same quarter of the last fiscal.
Total revenue during the quarter under review stood at Rs 11,942.9 crore as against Rs 10,470.86 crore in the year-ago period, up 14 per cent.

Earnings included Rs 91 crore profit from the transfer of agri-business to a fully owned subsidiary. Other income jumped 31.2 percent to Rs 216.8 crore from dividend received from subsidiaries and joint ventures.
The company reported 16 per cent jump in consolidated net profit at Rs 962 crore for the quarter ended June 2016. The company's gross revenues and other income increased by 14 per cent at Rs 11,961 crore in the quarter ended June 2016.
"Our Q1 FY 17 quarter results showed upswing. The gross revenues and other income together with MVML stood at Rs 11,961 crore as against Rs 10,478 crore during the corresponding period last year, a growth of 14 per cent. Consolidated volume activity from M&M and MVML showed a healthy growth of 9.7 per cent on a YoY basis with the units sold reported at 1,10,959 units ," M&M Executive Director Pawan Goenka told reporters here.

M&M sold 55,909 vehicles, posting a growth of 13 per cent on YoY basis and maintained market leadership with 31.6 per cent market share. The company sold 71,785 tractors in the domestic market, a YoY growth of 21 per cent, continuing leadership position with an increased market share of 43.9 per cent, Goenka said.

With normal rainfall and its improved spread across the country in the month if July, Kharif sowing has been more than last year. The company is hopeful for an improved output and tractor demand in the future.
Total company's total exports stood at 13,515 units, which include 10,569 vehicles and 2,946 tractors. The double-digit growth in domestic sales of tractors and two-wheelers witnessed in the first quarter of 2016-17 suggests that a recovery in the rural demand is under way, he said.

On outlook, Goenka said: "Given the robust rainfall received thus far and IMD's prediction of normal rains for the rest of the monsoon season, rural demand can be expected to gather further strength in the coming months providing a much needed boost to industrial activity in the country."
M&M started witnessing positive growth in second-half of FY16 and we hope that the growth trend will continue in the current year too, aided by new launches made in the last year, Goenka added.
It had posted a PAT of Rs 834.47 crore during the same
period a year ago.
The total income from operations during the third quarter rose to Rs 11,777.98 crore, up 1.47 per cent from Rs 11,607.35 crore earlier.

Goenka said that the auto industry was adversely impacted in the third quarter due to demonetisation with all the segments of the industry showing significant drop in demand in the months of November and December 2016.
This was in contrast to the overall positive sentiment and demand that prevailed in the period April to October.
He pointed out that the auto industry may see signs of recovery in February-March period.
Tractor sector may see 8-10 per cent growth in Q4 FY 17 and 16-17 per cent growth in FY 17 as compared to 20 per cent last year, he added.