M & M Net Profit Jumps 25 Per Cent

From Rs 1,154.70 crore in first six months of 1995-96, the utility vehicle and tractor maker has made net sales of Rs 1,428.61 crore for the same period this year.

Net profits have risen from Rs 73.8 crore to Rs 92.43 crore, while gross profit has swelled to Rs 163.36 crore, from Rs 142.33 crore. Interest costs have increased from Rs 20.13 crore to Rs 30.31 crore, while depreciation jumped to Rs 25.43 crore, from Rs 19.33 crore. Other income has remained stagnant and this, analysts said, was surprising. The second half should be much better, says Kapil Krishan, auto analyst with Peregrine Capital India Ltd.

 

They will have higher realisations due to the fact that excise benefits in the budget will accrue for the full six months. Also, tractor sales, down in first half, should pick up, he said.For the full year, he projects a 11 per cent growth in tractor sales, up from six per cent in first half, and a 17 per cent overall growth rate for all vehicles. Tractors contribute 40 per cent to Mahindras overall sales.

Operating margins have fallen slightly, from around 14 per cent to 13.92 per cent. Annualised EPS has risen to Rs 18.16 from Rs 15.73, while equity capital has gone up to Rs 101.8 crore, from Rs 56.8 crore following the 2:3 bonus in February this year.

For the full year, Krishnan estimates net profit at Rs 217 crore and other income will rise to Rs 81.7 crore, from Rs 38.27 crore.