Strong tractor growth pushes Mahindra profits up 10 percent

Mumbai, November 13, 2013: A strong showing by Mahindra & Mahindra’s tractor division helped the company record profits in Q2. Gross revenues and other income of Mahindra & Mahindra and Mahindra Vehicle Manufacturers, its wholly-owned arm, based at Chakan for the quarter ended September 30, 2013 was Rs 9887.6 crore as against Rs 10,786.7 crore during 2012-13. Net profit before tax was Rs 1,303.6 crore as against Rs 1327.2 crore in Q2 of the previous year.

After providing for tax, the profit is Rs 1,027.6 crore against Rs 978.1 crore in Q2 last year, up 5.1 percent. The operating margins for Q2 were 14.5 percent as compared to 13.8 percent in Q2 last year.

The lower gross revenues has been attributed to the ongoing slowdown with volumes shrinking by four percent in Q2. Despite this, the company says the growth in profits in Q2 was possible due to a strong sales performance by its tractors and a tight control on material costs and expenses.

In the UV segment, M&M sold 47,388 vehicles in Q2 with a market share of 39.6 percent. In the passenger cars segment, it sold 2,879 Verito and Verito Vibe cars. On the export front, the company shipped 8,059 vehicles in Q2 F2014.

As a result of a good monsoon across the country, the domestic tractor industry continued to show robust growth with sales of 141,171 tractors in Q2 as against 116,524 tractors sold in Q2 F2013, up 21.2 percent. Domestic sales at 57,549 tractors rose 22.3 percent over the 47,065 tractors sold in Q2 last year. Market share was up just a tad at 40.5 percent as against 40.2 percent in Q2 last year. Mahindra Powerol posted net revenues of Rs.171.1 crore in Q2 F2014 as against Rs 217.7 crore in Q2 last year.

On a standalone basis, gross revenues and other income of M&M for Q2 FY2014 is Rs 9,890.6 crore as against Rs 10,891.4 crore during the corresponding period last year. The net profit after tax was Rs 989.5 crore as against Rs 901.8 crore in the year-earlier period, up 9.7 percent.

The gross revenues and other income during the half-year ended September 30, 2013 was Rs 20,689.1 crore as against Rs 20,790.6 crore in 2012-13. The PAT for the current H1 is Rs 1,937.3 crore as against Rs 1,756.6 crore in H1 previous year, up 10.3 percent. The operating margin for H1 was 14.5 percent as compared to 13.9 percent in H1 last year.

On a standalone basis, gross revenues and other income of M&M for H2 was Rs 20,778.4 crore as against Rs 21,007.2 crore in 2012-13. Net profit for the current H1 is Rs 1,927.4 crore as against Rs 1,627.4 crore in H1 previous year, up 18.4 percent.