Mahindra & Mahindra rose 1.72% to Rs 894.40 at 15:18 IST on BSE after the company announced good Q2 September 2013 results during trading hours today, 13 November 2013.
Meanwhile, the S&P BSE Sensex was down 79.73 points, or 0.39%, to 20,202.18
On BSE, 1.96 lakh shares were traded in the counter compared with average volume of 1.32 lakh shares in the past one quarter.
The stock hit a high of Rs 898.95 and a low of Rs 875 so far during the day. The stock hit a record high of Rs 1,026.45 on 20 May 2013. The stock hit a 52-week low of Rs 741.50 on 28 August 2013.
The stock outperformed the market over the past one month till 12 November 2013, rising 0.81% compared with the Sensex's 1.20% fall. The scrip, however, underperformed the market in past one quarter, gaining 2.22% as against Sensex's 7.05% rise.
The large-cap company has an equity capital of Rs 307.94 crore. Face value per share is Rs 5.
The gross revenues and other income of Mahindra & Mahindra (M&M) and Mahindra Vehicle Manufacturers (MVML) (entity), fell 8.34% to Rs 9887.6 crore in Q2 September 2013 over Q2 September 2012. The net profit before tax fell 1.78% to Rs 1303.6 crore in Q2 September 2013 over Q2 September 2012. After providing for tax, the profit rose 5.06% to Rs 1027.6 crore Q2 September 2013 over Q2 September 2012. The operating margin of the entity rose to 14.5% in Q2 September 2013 from 13.8% in Q2 September 2012.
MVML, located at Chakan near Pune, was set up as a 100% subsidiary of the company with a view to sourcing contemporary products for expanding the market offerings of the company.
M&M said that the deceleration in the gross revenues in Q2 September 2013 is due to the challenging times the Indian auto industry, with volumes shrinking by 4% during Q2 September 2013, is currently passing through. Despite this, the entity could deliver a growth in the profits in the quarter due to a strong sales performance by its farm equipment sector and a tight control on material costs and all expenses.
In the passenger utility vehicle segment, the entity sold 47,388 vehicles in Q2 September 2013 with a market share of 39.6%. In the cars segment, the entity sold 2,879 Verito and Verito Vibe Cars. The entity also exported 8,059 vehicles in Q2 September 2013, M&M said.
In the wake of a good monsoon, the domestic tractor industry continued to show robust growth with tractors sales rising 21.2% to 141,171 tractors in Q2 September 2013 over Q2 September 2012. In this period, the company's domestic sales rose 22.3% to 57,549 tractors in Q2 September 2013 over Q2 September 2012. The company's market share rose to 40.5% in Q2 September 2013 as against 40.2% in Q2 September 2012. Mahindra Powerol posted net revenue of Rs 171.1 crore in Q2 September 2013 as against Rs 217.7 crore in Q2 September 2012.
On a standalone basis, M&M's gross revenues and other income fell 9.19% to Rs 9890.6 crore in Q2 September 2013 over Q2 September 2012. The net profit after tax rose 9.72% to Rs 989.5 crore in Q2 September 2013 over Q2 September 2012.
M&M group's consolidated gross revenues and other income of the rose 3.9% to Rs 18675.6 crore in Q2 September 2013 over Q2 September 2012. On account of a change in the status of Tech Mahindra from a joint venture to an associate effective 31 August 2012, the revenues reported above include M&M's share of Tech Mahindra revenue for two months only in Q2 September 2013. On a like to like basis the growth in the consolidated revenues is 6.6% in Q2 September 2013 over Q2 September 2012. The consolidated profit after tax before minority interest rose 17.8% to Rs 927.4 crore in Q2 September 2013 over Q2 September 2012. After deducting minority interest, the profit after tax rose 4.63% to Rs 835.7 crore in Q2 September 2013 over Q2 September 2012.
M&M said the group's recent acquisition Ssangyong Motor Company, South Korea, which had broken even in Q1 June 2013, continued its profitable ways with a 20% growth in consolidated revenues and a 114% growth in results in Q2 September 2013. The performance of Tech Mahindra with a 39% growth in consolidated revenues and a 58% increase in profits and that of Mahindra Finance with a 32% growth in consolidated revenues and a 21% growth in profits in the latest concluded quarter, were particularly noteworthy, M&M said.
In its outlook, M&M said that the Indian economy continues to struggle. With domestic demand weakening and manufacturing activity stagnating, growth in the first quarter of F2014 dropped to 4.4% and is likely to see only marginal improvement, if at all, in the second quarter. At the same time, inflation remains high and rising, limiting the space for growth supportive monetary policy action.
Nevertheless, we expect the economy to perform better in the second half of this fiscal, M&M said. First, as a result of both domestic policy actions and the US Fed maintaining status quo, near term balance of payments risks facing the Indian economy have eased, stabilizing the rupee and thus limiting cost-push inflationary pressures on the economy. Second, the robust agricultural harvest expected in the coming months is likely to dampen inflation while simultaneously boosting rural output, incomes & demand and thereby, productive activity in other segments of the economy.
Finally, with the advanced economies recovering, and the rupee no longer over-valued, exports should pick up speed in the coming quarters. Given these encouraging pointers, our current outlook on the economy is one of cautious optimism, M&M said.
The Mahindra Group operates in the key industries that drive economic growth, enjoying a leadership position in tractors, utility vehicles, information technology and vacation ownership. In addition, Mahindra enjoys a strong presence in the agribusiness, aerospace, components, consulting services, defence, energy, financial services, industrial equipment, logistics, real estate, retail, steel and two wheeler industries.
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