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Mahindra & Mahindra Q1 profit down YoY on one-time item

mahindraMahindra and Mahindra reported revenue of Rs. 10474 crore for the quarter ended June as against Rs. 10734 crore in the same quarter of the previous year.

The Net Profit after tax fell to Rs. 831 crore as against Rs. 896 crore last year due to the absence of a one-time gain that was there last year.

The Profit before tax for the current quarter is Rs. 1149 crore as against Rs.1202 crore in the corresponding quarter of the previous year.

The Net profit before tax for the current quarter is Rs. 1149 crore as against Rs. 1108 crore (after adjusting for one time gain) in the corresponding quarter of the previous year – a growth of 3.7%.

In the current quarter, the passenger vehicle market grew 8% driven by growth in the car segment, the company said.

“The utility vehicle segment continued to be under pressure and de-grew by 0.6%. In the commercial vehicle industry, the LCV segment continues to be in the negative but the MHCV goods segment continued to grow on back of improvement in industrial activity, movement in infrastructure projects and some replacement demand,” it said.

“The tractor industry witnessed a sharp de-growth in Q4 F2015 owing to the stress in the Agri Economy caused primarily by crop damage due to unseasonal rains. Going into Q1 F2016, uncertainty loomed over the prospect of a good Kharif crop with the IMD forecasting a less than normal monsoon.

This, along with only a marginal increase in Minimum Support Prices, resulted in subdued rural sentiments, leading to another quarter of de-growth in the Tractor industry. However, some positivity is seen in the later part of June 2015 with the monsoon setting in on time,” the company added.

In Q1 F2016, the domestic tractor industry de-grew 16.4%. With sales of 59348 tractors in the domestic market, the Combined Entity maintained its market leadership with a market share of 41.5%. The group exported 8449 vehicles and 3208 tractors, a growth of 29% and 24% respectively over the corresponding quarter in the previous year.

The group, with sales of 49354 utility vehicles during the current quarter, maintained its top position with a market share of 38.5%.

In May 2015, Mahindra launched the All New XUV500 packed with a host of cutting-edge technology features. In June 2015, the company launched its all new small commercial vehicle, the Jeeto. The Jeeto is the first ever product in its category with a modular range of 8 mini-trucks to cater to the varied needs of customers in the sub 1 tonne load segments of mini-truck, micro-truck and 3 wheelers.

The Gross Revenues and Other Income of Mahindra & Mahindra Ltd. for the quarter ended 30th June 2015 is Rs. 10629 crore as against Rs. 10863 crore in the corresponding quarter of the previous year.

The Net Profit after tax for the quarter is Rs. 852 crore for the current quarter as against Rs. 882 crore in the corresponding quarter of the previous year.

The Net profit before tax for the current quarter is Rs. 1150 crore as against Rs. 1111 crore (after adjusting for one time gain) in the corresponding quarter of the previous year – a growth of 3.5%. The Net Profit after tax for the current quarter is marginally lower at Rs. 852 crore as against the adjusted Rs. 854 crore in the corresponding quarter of the previous year.

Q1 F2016 – Group Consolidated Results

The consolidated Gross Revenues and Other Income of the Group for the Quarter ended 30th June 2015 is Rs. 19816 crore (USD 3.2 billion) as against Rs. 19831 crore (USD 3.2 billion) in the corresponding quarter of the previous year. The consolidated profit after tax after minority interest for the current quarter is Rs. 778 crore (USD 125.8 million) as compared to Rs. 962 crore (USD 155.5 million) in the corresponding quarter of the previous year.

The Net Profit after tax after minority interest for the current quarter is Rs. 778 crore as against Rs. 814 crore (after adjusting for one time gains) in the corresponding quarter of the previous year.

The Group as on 30th June 2015 comprised of 114 Subsidiaries, 8 Joint Ventures and 15 Associates. A full summation of Gross Revenues and other income of all the group companies taken together for the quarter ended 30th June 2015 is Rs. 27318 crore (USD 4.4 billion).

Outlook:

The Indian economy is gradually gaining momentum. Stalled projects are coming back online while new project announcements have picked up pace in the last couple of quarters. Capex trends, as a result, are far healthier today than they were a year ago, which bodes well for future growth.

While consumer demand remains weak, the better than expected rainfall received in the monsoon season thus far, provides room for optimism on this front as well. The country’s domestic and external vulnerabilities, at the same time, have moderated significantly on the sharp decline in its current account deficit, moderating inflation trend, improving fiscal position, and a return of capital inflows that have allowed for a significant buildup in foreign exchange reserves. Downside risks, nonetheless, remain.

Despite the consolidation in its macros, the economy remains vulnerable to potential surges in global financial market volatility and weaker global growth. Domestic risks stemming from overstretched corporate and bank balance sheets and the slowing pace of structural reforms, are also a source of some concern. The company’s balance sheet, however, remains healthy and well buffered, and it looks to the future with optimism, while remaining alert to the near term risks outlined above.

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