Bucking the recession that has plagued the automobile industry last year, Mahindra & Mahindra (M&M), the tractors and utility vehicles major, has notched up a 20.13 per cent rise in net profit to Rs 251.47 crore in 1997-98 from Rs 209.33 crore in the previous year. Its earnings per share (EPS) rose to Rs 24.33 (Rs 20.56).
Sales rose 14.02 per cent to Rs 4,127.95 crore in 1997-98 (Rs 3,620.47 crore). Net of excise, the total income stood at Rs 3,488.12 crore -- a 11.81 per cent rise over the previous year's figure.
The M&M board increased dividend payout to Rs 5.5 per share from Rs five per share. Operating profit rose to Rs 552.13 crore, up 12.23 per cent from the previous year's Rs 491.97 crore. Profit before tax touched Rs 329.47 crore (Rs 328.33 crore) while tax provisioning stood at Rs 78 crore. Interest costs rose to Rs 122.88 crore (Rs 80.51 crore).
M&M managing director Anand Mahindra said the company managed a higher growth due to the "greater emphasis on widening product base, besides the massive cost reduction exercise through value engineering material cost reduction, operational efficiency control, and strategic sourcing of components at low cost."
"Increased volumes have come mainly from rural and semi-urban markets which have consistently been our thrust areas," he added.
A wage settlement with the union at the company's automotive plant at Kandivli was signed in December 1997. It will be valid till December 2000. The settlement is based on the acceptance of Mahindra Production System which has resulted in a 100 per cent rise in productivity, a company press release said. A similar agreement was also reached at the company's tractors plant which is expected to result in a 125 per cent increase in productivity. The company's tractors division produced 71,468 tractors in 1997-98 (58,028 units). The division sold 67,780 tractors during the period, up from 57,379 units sold in the previous year. The company's market share in this segment also rose to 27.1 per cent during the year from 26 per cent in the previous year. The division introduced the 275 DI TU, an upgraded B 275 model and 585 C, a 585 DI model during the year.
The company's automotive division produced and sold 77,510 and 76,954 vehicles respectively in 1997-98 against 74,653 units produced and 75,568 sold in the previous year. The company's auto division sold 9804 vehicles during the first two months of the current year against 10,513 vehicles of the corresponding period last year. The tractor division sold 11,980 tractors during the first two months of the current year as against 12,319 sold in the corresponding period last year.
The division introduced 7 new models during the year which included the Mahindra Voyager, Commander Di Long, the Armada 98, Mahindra Utiliti, Mahindra Marshal, the Commander 650 DI and the CL 500/550 MDI during 1997-98.
