M&M Q3 Net Grows by 11.7%

Mumbai, 14th February 2014: The Board of Directors of Mahindra and Mahindra Limited today announced the unaudited financial results for the quarter ended 30th December 2013 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.

Mahindra-India

Q3 F2014 – M&M + MVML results
The Gross Revenues and Other Income of Mahindra & Mahindra Limited and MVML (Entity) for the quarter ended 31st December 2013 is Rs. 11270.0 crore as against Rs. 11522.3 crore during the corresponding period last year. The Net Profit before tax for the current quarter is Rs. 1318.2 crore as against Rs.1177.4 crore in Q3 previous year – a growth of 12.0%. After providing for tax, the profit is Rs. 1000.1 crore against Rs. 915.0 crore in Q3 last year – a growth of 9.3%. The operating margin of the Entity for the current quarter is 15.0% as compared to 13.5% in Q3 last year.

The deceleration in the Gross Revenues in the quarter is due to the challenging times the Indian auto industry is currently passing through with volumes shrinking by 11.7% in Q3 F2014. Despite this, the entity could deliver a very healthy increase in Operating Margin and a growth in the profits in the quarter due to a strong sales performance by its Farm Equipment Sector and a tight control on material costs and all expenses.

In the Passenger Utility Vehicle segment, the Entity sold 54164 vehicles in the current quarter with a market share of 38.2%. In the Cars segment, the Entity sold 1967 Verito and Verito Vibe Cars. The Entity also exported 8492 Vehicles in Q3 F2014.

In the wake of a good monsoon, the domestic tractor industry continued to show robust growth with sales of 181566 tractors in Q3 F2014 against 150562 tractors sold in Q3 F2013 – a growth of 20.6%. In this period, the Company’s domestic sales at 76362 tractors grew by 22.1% over the 62522 tractors sold in Q3 last year. Company’s market share was 41.9% as against 41.4% in Q3 last year. Mahindra Powerol posted net revenue of Rs.173.2 Crore in Q3 F2014 as against Rs.208.5 Crore in Q3 last year.

Q3 F2014 – M&M Standalone results
The Gross Revenues and Other Income of Mahindra & Mahindra Limited for the quarter ended 31st December 2013 is Rs. 11295.1 crore as against Rs. 11588.9 crore during the corresponding period last year. The Net Profit before tax for the current quarter is Rs. 1218.8 crore as against Rs.1059.9 crore in Q3 previous year – a growth of 15.0%. After providing for tax, the Profit for the quarter is Rs. 934.1 crore as against Rs. 836.2 crore in the same period last year – a growth of 11.7%.

YTD F2014 – M&M + MVML Results
The Gross Revenues and other income of the entity during the period ended 31st December 2013 is Rs. 31959.1 crore as against Rs. 32313.0 crore in the corresponding period previous year. The Net Profit after tax for Apr-Dec 2013 is Rs. 2937.4 crore as against Rs. 2671.5 crore in the corresponding period previous year – a growth of 10.0%. The operating margin of the Entity for the period ended December 2013 is 14.6% as compared to 13.7% in the same period last year.

YTD F2014 – M&M Standalone Results
The Gross Revenues and other income of Mahindra & Mahindra Limited during the YTD period ended 31st December 2013 is Rs. 32073.5 crore as against Rs. 32596.0 crore in the corresponding period previous year. The Profit after tax for the current YTD period is Rs. 2861.5 crore as against Rs. 2463.6 crore in the same period previous year – a growth of 16.2%.

Group Consolidated Results
The Board meeting to approve the accounts of a major subsidiary is still to be held. After the approval and announcement of its results, the company will separately release the information on Consolidated Group Turnover and PAT.

Outlook:
The advance GDP estimates released by the government indicate that India is likely to register a second consecutive year of sub-5% growth in F2014. The only bright spots during the year have been a growth in agricultural output and incomes in the wake of a healthy monsoon and a pickup in country’s exports aided by economic recovery in the advanced economies and a weakening domestic currency. Coupled with steps taken to curb gold imports, increase capital inflows and build foreign exchange reserves, this has helped limit (though not entirely remove) the country’s vulnerability to sudden stops and reversals of capital flows triggered by the US Fed’s ongoing ‘tapering’ actions. Looking ahead, current signals – strengthening recovery in advanced economies, stabilizing domestic currency, subdued commodity and oil prices, receding inflationary pressures, and rising business confidence – signify an uptick in economic activity in F2015. But, with future policy direction critically dependent on the outcome of the parliamentary elections due in May 2014, we maintain at present a cautious and watchful outlook on the economy.