Mahindra & Mahindra, India’s largest tractor and utility vehicle maker, recorded a net profit of Rs 26.7 crore for the quarter ended December 2008, a 93.3 per cent decline over the corresponding period the previous year. The Rs 182-crore foreign exchange loss in the quarter also tapered the profit of the company.
“The after-effects of runaway inflation of earlier months, paucity of retail finance, its high cost and lukewarm consumer sentiment in the wake of the global financial turbulence saw volumes decline,” said the company in a statement released on Saturday.
At 29,184 utility vehicles sold in the quarter, sales of such vehicles declined by 25.7 percent over the corresponding previous period. Sale of the tractors in the same period declined by 14.7 per cent to 20,686 units.
The decline in net profit came despite a better performance by its subsidiaries such as Punjab Tractors and Tech Mahindra, which recorded 38 per cent and 12 per cent growth in net profit, respectively. Mahindra and Mahindra has over ninety subsidiaries that contributed about half of the company’s profit last financial year.
The gross revenues and other income of the company in the quarter declined by 6.2 per cent to Rs 6,354 crore.
“The slew of policy measures taken by the RBI in the recent months should soon loosen the liquidity crunch,” said the statement the company on its outlook. The company also expects to benefit from cheaper oil prices, lower input cost and lower interest rate environment in the coming months.