M&M Q4 profit dips 39% to Rs 550.56 cr

Auto major Mahindra & Mahindra today reported a 38.61 per cent decline in net profit at Rs 550.56 crore for the March quarter as automotive and farm equipment segments slowed down amid unseasonal rain hailstorms in various parts of the country
The company had posted a net profit of Rs 896.88 crore in the corresponding period of the previous fiscal.
Net sales during the reporting period declined 13.2 per cent to Rs 9,411.52 crore from Rs 10,837.89 crore. Utility vehicles sales stood at 57,027, and tractor sales at 34,682 units down 30 per cent.
For the full fiscal, consolidated net profit declined to Rs 3,137.47 crore from Rs 4,666 crore in the previous year.

"The prevailing economic conditions combined with subdued consumer interest affected performance. We have witnessed de-growth of 30 per cent in our tractors sales in Q4, which has hit the performance severely. In Q4, sales were somewhat impacted due to rollback of excise duty concession from January 2015.
"The unseasonal rains and hailstorms in various parts caused crop damages. The crop damage, coupled with subdued crop prices resulted in loss of agri incomes which in turn created a negative sentiment in the farming community," executive director Pawan Goenka told reporters here.

"However, we are hopeful of rural demand picking up in the second half. With the likely good monsoons, we hope that the tractor segment will show growth of 5-6 per cent in the current fiscal. We also expect single digit growth in LCV segment this year, which had witnessed 4 percent de-growth last year," Goenka said.

He said the company will be launching nine products, including two new compact SUVs, variants, two-wheelers and tractors this fiscal. "With these launches lined up, we expect to outperform the industry. We are confident we will be contributing more than our share in overall growth in the market this year," he said.
M&M is seeking shareholders nod to raise around Rs 5,000 crore to fund businesses in profitable manner, he added.
Commenting on capex plans, Goenka said, the company plans to invest Rs 3,500 crore in FY16, of which Rs 2,500 crore will be invested in existing plants and R&D. It also plans to invest Rs 4,000 crore in Chakan unit over the next two years to expand capacity to 3,00,000 units and commence manufacturing in Tamil Nadu at a later stage, where it has acquired 100 acres.

M&M is also strengthening its overseas operations by launching tractors and selling Sanyoug products in Turkey and looking at setting up a local offices in Kenya, Nigeria and Egypt to capture opportunities in Africa.