Barring TVS Motors and Swaraj Mazda which reported a dip in bottomline, net profits of seven other listed original equipment manufacturers spanning the industry increased over the corresponding period last fiscal.
In the passenger vehicles segment, market leader Maruti Udyog Ltd reported a 43% rise in Q2 net profit while utility vehicles leader Mahindra & Mahindra reported a 27.8% jump. It was, however, M&Ms tractor division with 44% higher sales, and exports that contributed to its rise in profits. The company had, otherwise, reported a 4.5% fall in sales from its auto division, which makes utility vehicles, light commercial vehicles and three-wheelers.
So was the case with Tata Motors, which reported a 4.9% drop in passenger vehicle volumes. Indias largest auto manufacturer rode on 14% increase in commercial vehicle volumes to clock a 9.3% rise in net profits. This pales in comparison to rival Ashok Leyland which posted a 74% rise in net profit on the back of a 36.7% increase in turnover.
As in the case of M&M, good monsoons and a shift to higher range tractors proved beneficial for Punjab Tractors which posted a 55.6% rise in net profits. But as has been noticed in previous couple of quarters, cost-inflationary pressures due to increasing steel and crude oil prices have squeezed operating margins (excludes contributions from other income) of auto majors.