Industry

M&M reports 6 % drop in Q1 profit

Mahindra & Mahindra (M&M), on Friday, reported a drop of 6 per cent in its standalone net profit at Rs.881.78 crore for the quarter ended June 2014. The company’s net sales, however, grew 1.9 per cent to Rs.10,096 crore.



According to the company, the automotive industry in India is facing challenging times and during the quarter, M&M sold 52,180 utility vehicles and has a market share of 40.5 per cent.



The domestic tractor industry grew 1.2 per cent and M&M sold marginally more tractors at 72,166 units and its market share was at 42.2 per cent.



M&M’s results along with subsidiary Mahindra Vehicle Manufacturers show a 5 per cent growth in operating profit at Rs.1,419 crore and operating margin of 14.3 per cent (13.77 per cent).



Addressing a press conference, Pawan Goenka, Executive Director, M&M, said the quarter was a difficult one for both the company and the industry. “The automobile industry saw de-growth although there are signs of a turnaround in July.”



He said M&M maintained margins as commodity prices remained benign, through cost management and as it did not participate aggressively in incentives.



In commercial vehicles (CV), the sub 2-tonne vehicles is de-growing 25 per cent while the pick-ups in the 2-3.5 tonnes is growing well. M&M has a 70 per cent market share.



M&M’s automobile exports grew 30 per cent while tractor exports de-grew 15 per cent. It expects tractor exports to Brazil to ramp up and to Turkey later.



Mr. Goenka said that over the next 15 months, M&M would introduce three passenger cars and two commercial vehicles. “Also in the coming festive season, we plan to launch a scooter and a brand new tractor platform.”



He said the company maintained its earlier stated capital expenditure plan of Rs.10,000 crore over three years up to 2016-17.

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Printable version | Aug 5, 2020 4:54:34 AM | https://www.thehindu.com/business/Industry/mm-q1-profit-declines-598-to-rs-88178-crore/article6295562.ece

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