M&M net dips to Rs 236 crore

Utility vehicle and tractor manufacturer, Mahindra and Mahindra (M&M), has posted a decline in net profit to Rs 236.04 crore for the quarter ended March 31, 2007 compared with Rs 321.17 crore in the corresponding quarter of the previous year.

The last year's Q4 results, however, included a profit of Rs 146.54 crore on account of the initial public offer of M&M Financial Services. Profit in the March 2007 quarter, before exceptional items such as profit on the sale of long term investments (Rs 15.55 crore), rose by 35 per cent to Rs 240.94 crore from Rs 175.63 crore during the same quarter last year.

The income from operations grew by 20.85 per cent to Rs 2782.81 crore for the reporting quarter, from Rs 2302.60 crore during the same quarter of the previous year.

"The rising interest rates have not affected our passenger vehicle sales although our commercial vehicle sales have been affected as they are bought by customers who are more sensitive to price hike", said Pawan Goenka, president, M&M (automotive sector).

The net profit for the year ended March 31, 2007 grew by 24 per cent at Rs 1068.3 crore as compared with Rs 857.1 crore during the same period last year.

The income from operations rose by 23 per cent at Rs 10,245.2 crore as against Rs 8326.5 crore reported during the same period of the previous year.

The company hopes to surpass the industry figures in the coming quarters, with a sharp growth in light commercial vehicle (CV) and three-wheeler sales. The revenue contribution of the CV and the PV segment is currently in the ratio of 45:55.

The company's tractor division has postponed its expansion plans, as spare capacity is available at the newly acquired Punjab Tractors (PTL). The company had earlier earmarked Rs 350 crore for the purpose of adding capacities through a new greenfield plant and for funding its inorganic growth.

Anjani Kumar Choudhari, president, Mahindra Tractors, said, "There is some concern on the credit policy owing to which sales of our tractors could be affected. We are targetting a growth of 6-8 per cent during this financial year".

The consolidated profit after minority interest of the Mahindra group, including companies such as Tech Mahindra, Mahindra Finance, Mahindra Holidays and Mahindra Gesco among others, grew by 17.91 per cent to Rs 1497.14 crore for the year ended March 31, 2007 against Rs 1269.7 crore during the previous year. The total income (net of excise) increased to Rs 17,912.27 crore from Rs 12648.40 crore for the previous year.