Mahindra’s Q3 net profit up 7 percent; pressure on margins to continue

Propelled by growth in its utility vehicle and tractor businesses, Mahindra & Mahindra recorded a standalone net profit to Rs 617 crore during Q3 of 2011-12, a 7 percent growth over the same period last year. In Q3 last year, the company recorded a profit of Rs 117.5 crore from the sale of its holdings in Owens Corning India. The seven percent growth excludes the impact of the sale of Owens Corning shares last year. The OM during the current quarter stood at 12.2 percent. Gross revenues and other income of Mahindra & Mahindra for the quarter ended 31 December 2011 is Rs 8978.7 crore as against Rs 6684.0 crore during the corresponding period last year, up 34 percent.

The combined gross revenues and other income of M&M and its 100 percent subsidiary Mahindra Vehicle Manufacturers (MVML) for the quarter ended 31 December 2011 is Rs 9011 crore as against Rs. 6728 crore during the corresponding period last year, a growth of 33.9 percent. Excluding the exceptional item of last year, PAT during the current quarter of Rs 705.9 crore compared to Rs 608.5 crore in Q3 F2011, a growth of 16 percent. OM for the combined entity during Q3 stood at 14 percent. M&M’s management stated that margins ‘will continue to be under pressure’ in the coming quarters due to the challenging macro economic conditions.