Rising commodity prices and tight margins saw Mahindra & Mahindra (M&M), report a 9.9 per cent drop in its standalone net profit for the third quarter of 2011-12 at Rs. 662.15 crore (Rs. 737.38 crore). However, excluding impact of sale of Owens Corning shares in the third quarter last year, the net profit is up 7.3 per cent (Q3 FY11 net profit excluding this item is Rs. 617.2 crore).
Revenues were up 37 per cent to at. 8,327.2 crore (Rs. 7,306.81 crore). The operating margins during the quarter was 12.2 per cent.
The results of M&M, taken along with Mahindra Vehicle Manufacturers Ltd. (MVML), its fully-owned subsidiary in Pune to source contemporary products for new offerings, show a growth in net profit of 16 per cent at Rs. 705.90 crore (Rs. 608.50 crore) on a 33.9 per cent higher gross revenue of Rs. 9,011.2 crore (Rs. 6,728.6 crore). The operating margin for the combine was 13.8 per cent (15.8 per cent).
On the rationale for having a separate fully-owned company, Pawan Goenka, President, Automotive Sector, M&M, said, it was a special manufacturing arm, an independent company and a benchmark plant with a capacity of 12,000 units a month.In the passenger utility vehicle segment, M&M sold 51,702 units a growth of 22.9 per cent against industry growth of 18.4 per cent. It has a market share of 57.8 per cent.
The domestic tractor industry grew 12.7 per cent during the quarter. M&M's tractor segment saw sales of 62,342 units, a growth of 12 per cent. The market share during the period was 42.9 per cent. Tractor exports were 3,840 units.
The company is adding capacity at its Zahirabad plant which will come on stream in the second-half of 2013. “Production will be ramped up depending on what volumes exist. The current year demand will be met by existing capacity,'' he said.
To hike capacity
The company will be increasing the production capacity at its Chakan plant near Pune to cater to the increased demand for its new sports utility vehicle, XUV 500.
It received 25,000 bookings for the product and will be delivering 7,200 vehicles by draw of lots.
According to Mr. Goenka, President, Automotive division M&M, the current capacity is 3,000 units per month. This will go up to 4,000 units in three months.
Keywords: Mahindra & Mahindra