Mahindra & Mahindra reports marginally down Q2 profit at Rs 924 crore

With the fall in revenues from the farm equipment sector due to deficient monsoon being largely offset by the growth in CV sales and launch of new products, home-grown automaker Mahindra and Mahindra reported a marginally lower net profit after tax for the July-September quarter at Rs 924 crore as against Rs 947 crore in Q2 FY 2014-2015.

Gross revenues and other income for the quarter ended September 2015 stood at Rs 10,311 crore as against Rs. 10,386 crore in the corresponding quarter previous year.

The company claims that rainfall deficit of 14 percent adversely impacted the agri incomes and rural sentiments leading to a fourth straight quarter of de-growth for the tractor industry.

However, the passenger vehicle segment grew 6.3 percent, with good growth in the car segment, while the UV segment continued to be under pressure and de-grew by 4.3 percent.

In the commercial vehicle industry, the LCV segment continues to be in the negative but the MHCV goods segment grew on the back of improvement in industrial activity, movement in infrastructure projects and some replacement demand.

An uptick in exports for the automaker also aided its bottomline.

“We got a bulk order of 1075 vehicles from Philippines, which is a first for us and helped us enter this market. Also other existing export markets like Sri Lanka, Nepal, Bangladesh and Bhutan have picked up as well and resulting in better volumes,” said VS Parthasarathy, chief financial officer for the M&M group said while commenting on the automakers export performance.

Uptick in industrial production in the last three months driven by growth in capital goods volumes, a 22 percent yoy increase in new investments announced in the second quarter of this fiscal, robust indirect tax collections, suggest that the government's attempts to revive the economy are working. Given the visible improvements in the Indian economy, falling interest rates and benign fuel prices the automaker is hopeful of better sales in the coming quarters and in turn better results.