Mahindra & Mahindra (M&M) reported a 20 per cent rise in net profit for the first quarter ended June 30, 2012, at Rs.725.6 crore.
In a statement, the company attributed the profit growth to good volume performance by the automotive sector and tight control on expenses.
The company said its gross revenues and other income grew 35 per cent to Rs.10,004 crore. The operating margin fell 150 basis points to 11.8 per cent in Q1.
The net profit, including that of Mahindra Vehicle Manufacturers Ltd (MVML), rose 26 per cent to Rs.778.5 crore, while the combine’s revenue rose 35 per cent to Rs.10,004 crore. MVML, which is located at Chakan near Pune, was set up as a fully-owned subsidiary to source products to expand M&M’s market offerings.
In the passenger utility vehicle (UV) segment, the company sold 32 per cent more units at 58,615 units and had a market share of 49.8 per cent. In cars, it sold 2,888 Verito cars.
Exports were up 37.2 per cent at 7,841 vehicles to markets in South America and South Africa.
The company said that after three years of strong growth, the domestic tractor industry saw a marginal volume growth of 2.3 per cent in the first quarter.
In this period, M&M sold 41.5 per cent more tractors at 56,861 tractors. Tractor exports grew 4 per cent to 3,020 units during the quarter.
In its outlook, M&M said the country’s economic performance in the first quarter had been weak. “Industrial volumes were virtually flat; more worryingly, capital goods production witnessed a contraction for the fourth successive quarter, reflecting the weak investment sentiment prevailing in the economy.” Further the company said, “The drought-like conditions prevailing in several states today has only added to the risks facing domestic companies. Our near-term outlook on the economy is cautious and watchful.”