Mahindra & Mahindra and MVML Records 28.4% Growth in Q2 2012

The Board of Directors of Mahindra and Mahindra Limited yesterday announced the unaudited financial results for the quarter ended 30th September 2012 for the company. Mahindra Vehicle Manufacturers Limited (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. Hence it is a critical part of its business and only the combined results of the company and MVML can provide a comprehensive view of company’s performance.

Q2 F2013 – M&M + MVML results

The Gross Revenues and Other Income of Mahindra & Mahindra Ltd. and MVML (Entity) for the quarter ended 30th September 2012 is Rs. 10786.7 crore as against Rs. 8235.8 crore during the corresponding period last year – a growth of 31.0%. The Net Profit before tax for the current quarter is Rs. 1327.2 crore as against Rs.1001.4 crore in Q2 previous year. After providing for tax the same is Rs. 978.1 crore against Rs. 761.5 crores in Q2 last year - a growth of 28.4%. The operating margin of the Entity for the current quarter is 13.8%.

The growth in the profit despite the relentless increase in material costs is due to good volume performance by Automotive Sector and tight control on expenses.

In the Passenger Utility Vehicle segment, the Entity sold 62751 vehicles in the current quarter - a growth of 32% over the numbers sold in Q2 last year. In the quarter the entity launched the all new compact and versatile SUV Quanto to strengthen its portfolio in the UV segment. Quanto generated 5000 bookings in just the first three weeks of its launch. The Entity continued its leadership position with a market share of 45.4%. In the Cars segment, the Entity sold 4899 Verito Cars. The Entity also exported 10349 Vehicles in Q2 F2013 registering a growth of 43.0% over 7239 vehicles exported in Q2 last year.

The domestic tractor industry, in the wake of a below normal monsoon, witnessed a 12% de-growth in sales in Q2. In this period, the Entity sold 47065 tractors in the domestic market as compared to 54585 tractors in Q2 last year, with a domestic market share of 40.3%. The Entity exported 3043 tractors in the quarter and its Engine business revenue grew by 11.1% to Rs 231.3 crore in the same period.

Q2 F2013 – M&M Standalone Results

The Gross Revenues and Other Income of Mahindra & Mahindra Ltd. for the quarter ended 30th September 2012 is Rs. 10891.4 crore as against Rs. 8212.0 crore during the corresponding period last year – a growth of 32.6%.  The Net Profit after tax for the quarter is Rs. 901.8 crore as against Rs. 737.4 crore in the same period last year – a growth of 22.3%. 

H1 F2013 – M&M + MVML Results

The Gross Revenues and other income of the entity during the half year ended 30th September 2012 is Rs.20790.6 crore as against Rs.15635.8 crore in the corresponding period previous year – a growth of 33.0%.  The Profit after tax for the current H1 is Rs 1756.6 crore as against Rs 1379.8 crores in H1 previous year – a growth of 27.3%.  The operating margin of the Entity for the first half of the year is 13.9%.

H1 F2013 – M&M Standalone Results

The Gross Revenues and other income of Mahindra & Mahindra Ltd. during the half year ended 30th September 2012 is Rs.21007.2 crore as against Rs.15530.6 crore in the corresponding period previous year – a growth of 35.3%.  The Profit after tax for the current H1 is Rs 1627.4 crore as against Rs 1342.3 crores in H1 previous year – a growth of 21.2%. 

Group Consolidated Results

The Board meeting to approve the Q2 F2013 accounts of Tech Mahindra is being held in early Nov 2012. After the approval and announcement of Tech Mahindra results, the company will separately release the information on Consolidated Group Turnover and PAT.

Outlook:

Tight macroeconomic and political constraints at home and worries about a second global recession have taken a heavy toll on the Indian economy which grew by only 5.5% in Q1 F2013. Also while the manufacturing activity stagnated and the country’s fiscal and current account deficits worsened considerably in the first half of the year, inflation remained stubbornly high and is set to breach 8% in the coming months. In a determined bid to stem the tide, the government, after a long hiatus, has announced a slew of major reforms in September including a hike in diesel prices, disinvestment plans for the current year and allowing FDI in multi brand retail. While these measures have helped bolster business sentiment, and are a clear positive for our longer term growth prospects, the risks facing the economy over the shorter term, emanating from the possibility of a meltdown in the Euro Zone and escalating tensions in Middle East, remain high. The current economic situation is quite challenging. However, the company through its continuous focus on new product introduction, process innovation and cost control, expects to rise to this challenge adequately.