The country’s largest utility vehicle manufacturer, Mahindra and Mahindra on Friday missed estimates by registering a decline of 14.04% (Y-o-Y) in its net profit (standalone) during the October-December quarter at Rs 807.39 crore on the back of less than expected growth in the tractor volumes.
During the same quarter last year, the company made an exceptional gain by selling shares worth R300 crore of Mahindra Engineering Services (MESL). During the quarter under review, industry volumes in the tractor segment declined 10% but M&M’s volumes grew by 5%. The market share in the farm equipment sector stood at 43% during the quarter.
Net sales during the period grew in line with estimates, up 17.08% y-o-y to Rs 10,900.39 crore on the back of growth in the utility vehicles and the small commercial vehicles. The operating profit or EBITDA during the period grew 24.96% y-o-y to Rs 1242.45 crore.
The revenues in the farm sector increased by only 5% y-o-y to Rs 3582.87 crore while the same for the automobile segment grew by 21.6 % to Rs 6917.30 crore as result of the good response for new products like TUV 300 (a compact SUV), Jeeto ( a sub 2 ton LCV) and existing products like the XUV 500 and the new generation Scorpio during the festival period.
“This quarter has been one of the best in the recent years for the company. We have had good volume growth in the automobile segment and in the less than 2 ton light commercial vehicle segment also we have grown 173% y-o-y in the last quarter,” said Pawan Goenka, execute director Mahindra and Mahindra, (M&M).
Exports in the auto segment during the quarter increased 20% y-o-y especially in neighbouring countries like Sri Lanka, Nepal, Bhutan and Phillipines.
“Rabi sowing has been 3% lower than last year so growth in the rural area will be lower. We have seen two consecutive poor monsoons and I hope this year we are expecting a healthy one,” added Goenka.
On consolidated basis which includes the Mahindra Vehicles Manufacturer Limited (MVML) the net profit decreased by 15.11% y-o-y to Rs 820 crore. Revenues were up 14.95% y-o-y to Rs 10,465.61.