M&M Posts 7.56% Net Profit Growth in Q1 at INR 604 crore

Utility manufacturer, Mahindra & Mahindra recently posted a growth of 7.56% in their net profits for the June 30 ended quarter, with a standalone net profit of IRN 604.88 crores, boosted by good measures for expenditure control and good sales.

In the same period in 2010, the company had posted net profit as INR 562.39 crores. The total standalone income reportedly increased to INR 6,733.54 crore in Q1 of this fiscal, a growth of 30.49%. This is in comparison to last year during the same period, when it posted a total income of INR 5,160.10 crores. According to M&M, the growth in the company’s profit in spite of increasing cost of materials was due to good performance volumes by tractors and vehicles as well as the company keeping tight control on expenditure.

The total sales of the company in this quarter reportedly increased to 1,01,997 units, in comparison to the year ago period when it sold 82,093 units, an increase of 24.25%. Domestic market sales were around 96,280 units, an increase of 22.93% over last year’s 78,318 units. Meanwhile, the exports of the company increased to 5,717 units, a jump of 82.94% over last fiscals Q1 exports of 3,125 units.

The company also saw sales of its passenger vehicles rise by 20% in the period of April to June to 48,214 units, in comparison to last year’s Q1 passenger vehicle sales of 40,178 units. The tractor sales of the company also increased in Q1 to 20% this fiscal year to 57,500 units, from the same quarter last year, when it sold around 47,916 tractors.

M&M was also stated as saying that with inflation being at 95 since the last year, RBI had tightened their policy stance in the last few months, causing a rapid increase in loan rates, thereby adversely affecting the industrial growth and demand in the domestic market. However, with the prospects for the service and agricultural sector remaining strong, the business outlook of the company for this fiscal is positive, however, watchful.

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