Mahindra to Invest Rs 8,600 crore in next five years

India's largest utility vehicle maker Mahindra & Mahindra announced on Thursday that it will inject as much as Rs 8,600 crore in its operations in the coming five years. The company has posted a massive 40.30 per cent growth in its net profit in the first quarter of this financial year. The company reported a net profit of Rs 562.39 crore during April-June period this year as compared to Rs 400.85 crore in the same period last year. The massive jump in net profit has been registered despite incurring a 10 percent production loss due to supply constraints of auto components. The company sold 53,948 units of its utility vehicles during this quarter as against 48,720 units during same period last year. 

The total income of the company grew by 21.63 per cent to  Rs 5,160.10 crore during the period as compared to the revenue of Rs 4,242.59 crore earned during a year ago. The sales volume of the company's vehicles jumped by 10.73 per cent. According to Mr Pawan Goenka, President (Automotive and Farm Equipment) of the company, the company has earmarked around Rs 8,600 crore for the next five years. Out of this, Rs 5,600 crore will be used for the Chakan plant. He added that the company doesn't have any plans to raise funds and at present it has surplus funds of about Rs 2,500 crore.

Mr Bharat Doshi, Executive Director and Group Chief Financial Officer at M&M, told the reporters that the company is setting up a new plant in the next five years at Chakan and the investment will be done in a phased manner. The company had recently announced a Rs 4,500 crore capex for coming three years, a major chunk of which will be injected at its Chakan plant. The company aims to achieve an annual production capacity of 3 lakh units at this facility.