M & M Q2 net up 146 %

Mumbai, October 26, 2006: Mahindra & Mahindra Limited today announced the unaudited financial results for the second quarter ended 30th September 2006.

Q2 - Group Consolidated Results:

The Gross Revenues and Other Income for the second quarter ended 30th September, 2006 of the Consolidated Mahindra Group at Rs. 4617.6 crores (USD 1 bln) grew by 45.7% over Rs. 3170.1 crores (USD 0.7 bln) for the second quarter last year. The profit before exceptional items and tax for the current Q2 is Rs. 617.2 crores (USD 134.3 mln) as compared to Rs. 329.3 crores (USD 74.7 mln ) in Q2 F2006 "� a growth of 87.4%. This is due to the excellent performance of both the parent company and group companies. There was an exceptional profit of Rs 153.5 crores (Rs 124.4 crores post-tax) in the current quarter that accrued to the Group due to the Tech Mahindra IPO. The consolidated group Profit after considering exceptional items and tax and after deducting minority interests for the current quarter is Rs.510.3 crores (USD 111 mln) as against Rs. 218.7 crores (USD mln 49.6) earned in the same period last year "� a growth of 133.3%.

H1 Group Consolidated Results:

The Gross Revenues and Other Income for the half-year ended 30th September 2006 grew by 44.6% to Rs. 8797.2 crores (USD 1.9 bln) from Rs. 6084.6 crores (USD 1.4 bln) for the previous half-year. The profit before exceptional items and tax for H1 current year is Rs. 1097 crores (USD 238.6 mln) as compared to Rs. 591.1 crores (USD 134.1 mln) in H1 previous year "� a growth of 85.6%. The consolidated group Profit after exceptional items and tax and after deducting minority interests for H1 F2007 is Rs. 800.3 crores (USD 174.1 mln) as against Rs. 407.9 crores (USD 92.5 mln ) earned in the same period last year "� a growth of 96.2%.

Q2 M & M Stand Alone Results:

The Gross Revenues and Other Income of Mahindra & Mahindra Ltd for the second quarter ended 30th September 2006 at Rs. 2890.1 crores registered a growth of 30.6%. over Rs. 2212.1 crores for the second quarter of the previous year. Profit before exceptional items and tax for the current quarter is Rs. 407.9 crores as compared to Rs. 205.8 crores in Q2 last year "� an increase of 98.2%. The improvement in profits is due to strong sales performance by both the Automotive and Farm Equipment Sectors of the company and continued focus on operating and financing costs. During the current quarter there was an exceptional profit of Rs.117.5 crores (Rs 88.4 crores crores post-tax) arising out of sale of a portion of the company's holdings in its subsidiary - Tech Mahindra Ltd., offered as a part of the subsidiary's Initial Public Offering. The Net Profit for the quarter after considering exceptional items and taxation is Rs.386.5 crores as against Rs.157.2 crores in Q2 previous year "� an increase of 145.9%

H1 M & M Stand Alone Results:

The Gross Revenues and Other Income of Mahindra & Mahindra Ltd during the half-year ended 30th September 2006 is Rs.5438.7 crores as against Rs.4281.6 crores during the corresponding period last year a growth of 27%. Profit before exceptional items and taxation for the current half-year is Rs. 691.9 crores "� an increase of 83.1% over Rs.377.9 crores in H1 last year. The company's Net Profit for the half-year ended 30th September 2006 after considering exceptional items and taxation is Rs.590.7 crores "� an increase of 95.3% over Rs.302.5 crores in H1 F2006.

Automotive Sector:

In the Utility Vehicles segment, the company sold 29,449 nos. in Q2 F2007 against 26,601 in the corresponding quarter last year "� a growth of 10.7% against an industry growth of 13.5%. The Sales growth was mainly due to the growth in demand for Hard Top Vehicles. The Scorpio continued its strong performance in the market with a 20% improvement in volumes over Q2 last year. The Bolero variants also witnessed good growth. The Company remained the market leader in the UV segment with a share of 45.7% in the second quarter.

In the 4MT LCV segment, the sales of Mahindra vehicles increased by 5.7% to 1,991 against a 4.4% decline in industry sales. The Company had a market share of 19.3 % in the quarter as against 17.44 % in Q2 last year.

In the large 3-wheeler segment, while the industry volumes declined during the quarter by 19.6%, the company's volumes declined by only 13.8% to 4273 nos. The market share of the company improved from 44.1% in Q2 last year to 47.2% during the current quarter.

The Company's vehicle export saw a strong growth of 51.5% with the Company exporting 2,761 vehicles in Q2 F2007 as compared to 1,822 vehicles exported in Q2 last year. This is the highest ever quarterly vehicle export volume for the Company.

Farm Equipment Sector:

The domestic tractor industry registered a healthy growth of 39.9% in the second quarter of F2007 over Q2 last year. The company sold 21,801 tractors in the current quarter as against 17,096 tractors in Q2 F2006, with a market share of 28.7%. The company's exports registered a growth of 64.1% in Q2 with a sale of 1,764 tractors as against 1,075 tractors in Q2 F2006.

Engine business clocked a growth of 78% in Q2 F2007 with sales of 6934 engines (including engines captively used for DG set manufacturing) against 3897 engines in same period last year.

Group Companies:

The Group comprised of 58 Subsidaries, 4 Joint Ventures and 9 Associates as on 30th of Sept 2006. In Q2 F2006, the major Group companies like Tech Mahindra, Mahindra Finance, Mahindra Holidays, Mahindra Gesco etc. returned a significantly improved performance over Q2 last year. The performance of Tech Mahindra, with a Revenue growth of 173% and PAT growth of 373% during the quarter, was truly outstanding.

Outlook:

The Indian economy continues to maintain a healthy momentum. Driven by an improvement in manufacturing activity and a robust services sector performance, real GDP grew by a healthy 8.9 percent in Q1 of the current fiscal. With the Index of Industrial production showing a rise of 10.6% in the April-August period and crude oil prices stabilizing at levels lower than expected, the economy is expected to maintain robust growth through the rest of the year. The company expects to maintain a healthy market performance in the second half of the year.