M&M and MVML net leaps by 35.5% in Q4 F2012

The Board of Directors of Mahindra and Mahindra Limited today announced the financial results for the quarter ended 31^st March 2012 of the company and the audited results for the year ended 31^st March 2012 for the company and the consolidated Mahindra Group. 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 will provide a comprehensive view of company’s performance.

Q4 F2012 – M&M + MVML Results

The Gross Revenues and other income of Mahindra & Mahindra Ltd. and MVML during the quarter ended 31^st March 2012 is Rs.10333.6 crore as against Rs.7542.5 crore in the previous year – a growth of 37.0%.  The Net Profit before tax for the current quarter is Rs. 976.2 crores as against Rs. 858.3 crores in Q4 previous year. After providing for tax the same is Rs. 911.3 crores against Rs. 672.4 crores in Q4 last year - a growth of 35.5%.

Q4 F2012 – M&M Standalone results

The Gross Revenues and Other Income of Mahindra & Mahindra Ltd. for the quarter ended 31^st March 2012 is Rs.10288.4 crores as against Rs.7407.1 crores during the corresponding period last year – a growth of 38.9%.  The Net Profit after tax for the quarter is Rs. 874.5 crores for the current Q4 as against Rs. 606.5 crores in the same period last year – a growth of 44.2%.

F2012 – M&M + MVML Results

The Gross Revenues and other income of Mahindra & Mahindra Ltd. and MVML during the year ended 31^st March 2012 is Rs. 35005.2 crore as against Rs. 26201.1 crore in the previous year – a growth of 33.6%.  The Net Profit before tax for the current year is Rs. 3785.8 crores as against Rs.3544.5 crores in the previous year. After providing for tax the same is Rs. 2997.0 crores against Rs. 2687.0 crores in the previous year - a growth of 11.5%. The Operating Margin for the combined entity in the current year is 13.3%.

The growth in the profits of the company, despite the relentless increase in material costs, is due to a good volume performance by both Vehicles and Tractors and tight control on expenses. Also, the Scheme of Arrangement for the merger of the automotive business of M&M’s subsidiary, Mahindra Automotive Distributors Ltd. (MADPL), with M&M was approved by the Honourable High Court of Bombay vide its order dated 30^th March 2012 and as required by the order, it has been given effect to w.e.f. 1^st April 2011.  In view of this, the Verito business of MADPL became a part of the current year financials of the company. Also, due to the merger, the past unabsorbed tax losses related to automotive business of MADPL became available to the company and there was a one time tax saving during the current year.

F2012 - M&M Standalone results

The Gross Revenues and other income of Mahindra & Mahindra Ltd. during the year ended 31^st March 2012 is Rs. 34820.3 crores as against Rs. 25989.2 crores in the previous year – a growth of 34.0%.  The Net Profit after tax for the current year is Rs. 2878.9 crores against Rs. 2662.1 crores in the previous year - a growth of 8.1%. In the Passenger Utility Vehicle segment, the company sold a total of 202217 vehicles, registering a growth of 19.5% in F12. The company continued its dominant position in the market with market share of 55.1%. In the Cars segment, the Company sold 17839 Verito cars, registering a robust growth of 78.2% over previous year, with a market share of 9.5%. The company exported 29,176 Vehicles in F2012 as against 17,138 vehicles in F2011 registering a growth of 70.2%. SAARC, South America & South African market extended healthy support to company products

For the third consecutive year, the company was the single largest tractor company in the world, by volume, with sales of 236666 tractors against 214325 tractors sold last year - a growth of 10.4%. This includes domestic sales of 222944 tractors against 202513 tractors sold last year. With 41.4% market share in the domestic tractor market, the company celebrated its 29^th consecutive year of domestic market leadership. Also, the company’s exports during the year grew by 16.2% to 13722 tractors as compared to 11812 tractors exported in the previous year. The Board of Directors has recommended a dividend of Rs. 12.50 (250%) per share of face value Rs. 5 which will absorb a sum of Rs. 868.61 crores inclusive of tax (previous year Rs. 11.50 (230% of which 210% normal and 20% special) per share of face value Rs.5.00 each which absorbed an amount of Rs. 802.64 crores inclusive of tax) and will be paid to those shareholders whose names stand registered in the books of the company as on the book closure date.

F2012 – Group Consolidated Results

The consolidated Gross Revenues and Other Income for the year ended 31^st March 2012 grew by  58.9 % to Rs. 63357.8 crores (USD 13.3 billion) from Rs. 39864.4 crores (USD 8.3 billion) in last year. The consolidated profit for the year after exceptional items and after deducting minority interests is Rs.3126.7 crores (USD 654.5 million) as compared to Rs. 3079.7 crores (USD 644.7 million) earned in the previous year – a growth of 1.5%. The commendable growth in group revenues during the year is due to the inclusion of the turnover of Ssangyong Motor Company Limited during the year. The sluggish growth in group profits is also to some extent due to the inclusion of Ssangyong results. Excluding Ssangyong, the growth in consolidated Gross Revenues is 28.1% and that in profits 14.5% During the year, some of the major group companies like Mahindra Finance, Mahindra Lifespace Developers and Mahindra Forgings significantly improved their performance over the previous year. The performance of Mahindra Finance with a 43% growth in consolidated revenues and a 30% increase in profits, and that of Mahindra Forgings with a 27% growth in consolidated revenues and a 10% profit growth, deserve special mention. The Group at the end of the year comprised of 114 Subsidiaries, 6 Joint Ventures and 11 Associates. A full summation of Gross Revenues and other income of all the group companies taken together for the whole year F2012 is Rs 73556.8 crores (USD 15.4 billion).

Outlook:

After a rapid recovery following the global financial crisis, India’s economic performance faltered in F2012. Entangled in a web of unexpectedly high energy prices, economic deceleration in advanced economies, strained government finances, steep erosion in the value of the Rupee, high inflation and hardening interest rates, the country’s economic growth dropped to 6.9 percent this year from the 8.4 percent growth registered in the previous two fiscals. While the agricultural and services sectors displayed resilience, the unsettled global outlook and weak domestic economic environment, took a heavy toll on industrial activity and growth. With global risks escalating, and continued weakness in the domestic macro environment, the near term outlook for the economy is quite challenging. However, the company through its continuous focus on new product introduction, process innovation and cost control, expects to meet this challenge. The Company expects growth to pick up in the second half of 2012-13 and its medium/long term outlook on the Indian economy is positive.