)
The tractor market leader beat street expectations which had expected the net profit to be around Rs 785 crore for the reporting quarter. During the same quarter last year the company had posted a net profit of Rs 938 crore.
Pawan Goenka, executive director, Mahindra & Mahindra said, “It had been a difficult quarter for both tractor and auto sector. Both had shown slight degrowth. However, commodity prices remained benign during the quarter and we did not participate in giving out incentives. We had also taken better cost control measures”.
It should be noted that the merger of the truck and bus business into M&M happened in the last quarter of last year. The incremental financial numbers from this business is added from the reporting quarter.
M&M reported 8% fall in sales of automobiles last quarter to 52,180 units. The company has been facing headwinds due to strong competition from Maruti Suzuki, Honda, Ford to name a few. Its market share in the utility vehicle which once stood at 55% (Q1FY12) declined to 40.5% (Q1FY15).
Tractor sales grew by 0.7% to 72,166 units during the reporting quarter as against 71,696 units sold in the same quarter a year ago. Its market share in the segment improved to 42.2% from 41.4% posted in same quarter last year.
The below normal monsoon so far has impacted tractor off-take forcing M&M to revise the growth for the industry. “The tractor industry is forecasted to grow 5% as against 8% predicted earlier due to delayed monsoon. The passenger vehicle growth should be in the region 5-10%”, added Goenka.
Operating margins improved to 14.33% during the quarter as against 13.77% reported in the same quarter last year, the company declared. In the last quarter of previous year the margins had dipped to 12.8%.
In the coming quarters the company has lined up a series of launches across all the segments. At least five new products including three passenger vehicles and two commercial vehicles are slated to be launched in the next 15 months. In addition, a new scooter, a high powered tractor called M Star will also be launched in the coming festive season.
Two directors Arun Nanda, non independent and Narayanan Vaghul independent have retired from the board of the company. Nanda however will retain the chairmanship of Mahindra Holidays, the time share company of the group.
