Stimulus package, easy availability of retail finance help
Recommends Rs. 9.50 a share dividend,
including a special dividend
Mahindra-Navistar will launch trucks,
HCVs by next month-end
MUMBAI: A strong performance from the automobile and farm equipment sectors saw Mahindra & Mahindra report a 36 per cent growth in its net profit at Rs. 570 crore for the fourth quarter of 2009-10 against Rs. 418 crore in the corresponding period of the previous year. Gross revenues and other income for the period were up 40 per cent at Rs. 5,807 crore (Rs. 4,139 crore). The operating margin during the quarter was 15.94 per cent (15.29 per cent).
On a standalone basis, for 2009-10, M&M reported a net profit of Rs. 2,088 crore (Rs. 837 crore), a growth of 150 per cent. Gross revenues were up 37.5 per cent at Rs. 20,595.50 crore (Rs. 14,983.40 crore).
The directors have recommended a dividend of Rs. 8.75 per share and a special dividend of 75 paise per share of the face value of Rs. 5 each aggregating Rs. 9.50 per share. The special dividend was recommended in the light of the successful listing of Mahindra Holidays & Resorts Ltd. on the stock exchange during the year.
On a consolidated basis, the net profit was up 76.4 per cent at Rs. 2,478.60 crore (Rs. 1,405.40 crore) on 17 per cent higher gross revenues and other income of Rs. 33,790 crore (Rs. 28,992 crore). These figures do not include the results of Satyam Computer Services.
M&M has attributed a host of factors for its improved performance, including the government's stimulus package, easy availability of retail consumer finance and the government focus on agriculture and lower commodity prices although they started to firm up in the second quarter of the fiscal.
In the quarter under review, the company continued to show robust volume growth in the automotive business with utility vehicle (UV) sales rising by 24 per cent to 59,526 units (48,088 units). The company's market share was 60.8 per cent. While volume was driven by sales of Xylo, Scorpio and Bolero, in the small 4W cargo segment, Maxximo, which was launched in February 2010, was well received. The company sold 44,344 tractors (28,679 units), a growth of 55 per cent.
Pawan Goenka, President (Automotive & Farm Equipment Sectors), said “Rise in raw material prices and expected increase in interest rates would be the challenges for us in the current financial year.”
Reacting to reports of M&M bidding for the cash-strapped Korean automobile company Ssangyong Motor Company, Mr. Goenka said, “We have only put in an expression of interest (EoI) among seven others and it would be too early to comment. We will have more to share once the due diligence process is done. They make a range of sports utility vehicles (SUVs) with 80 per cent of their business coming from the segment. There are areas of complementarity in products, technology and markets. We are in a similar business and have no presence in Korea.”
Mr. Goenka said that by the end of June, the Mahindra-Navistar joint venture would start launching its trucks and other heavy commercial vehicles (HCV).
Uday Phadke, President (Finance, Legal & Financial Services Sector), said “We have not reduced our capital expenditure plans and for the next three years, it stands at Rs. 4,500 crore.