Mahindra and Mahindra and MVML sees 2012 Q1 net profits growth of 25.9%
Unaudited financial results for the second quarter of 2012 have been approved by Board of Directors. NPBT for the quarter stands at Rs.1049.8 crores as compared to Rs.836.3 crores in Q1 of the previous year. Profit after Tax stood at Rs.778.5 crores while this figure was Rs.618.3 crores in Q1 last year resulting in a growth of 25.9%. Operating margin for current quarter is at 13.9%. These profits are particularly noteworthy despite rising material costs which the company had to contend with by keeping a tight rein on expenses.
In Passenger utility vehicles segment Entity sold 58,615 units this quarter resulting in a 32% growth over sales in Q1 last year. Entity sales led to stronger market position with market share reaching 49.8%. Exports were also higher with 7841 vehicle exported as compared to 5717 vehicle exported in Q1 last year. South Africa and South America continued to be major markets for Entity products.
Exports during the quarter increased by 3.9% and stood at 3020 tractors while 2908 tractors were exported in Q1 last year. These results were good while taking India’s economic performance into account. In the first quarter of the current fiscal, performance has been weak, Industrial volumes have been flat while situation has been causing some concerns in the market. The situation is likely to remain same following inflation which stood at 7.25% in June 2012 coupled with a poor monsoon this season.
News release: M&M and MVML Q1 Net grows by 25.9%
The Board of Directors of Mahindra and Mahindra Limited today approved the unaudited financial results for the quarter ended 30th June 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.
Q1 F2013 – M&M + MVML Results
The Gross Revenues and other income of Mahindra & Mahindra Ltd. and MVML (Entity) during the quarter ended 30th June 2012 is Rs.10003.9 crore as against Rs.7400.0 crore in the previous year – a growth of 35.2%. The Net Profit before tax for the current quarter is Rs. 1049.8 crore as against Rs.836.3 crore in Q1 previous year. After providing for tax the same is Rs. 778.5 crore against Rs. 618.3 crores in Q1 last year – a growth of 25.9%. The operating margin of the Entity for the current quarter is 13.9%.
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 58615 vehicles in the current quarter – a growth of 32% over the numbers sold in Q1 last year. The Entity continued its strong position with a market share of 49.8%. In the Cars segment, the Entity sold 2888 Verito Cars. The Entity also exported 7841 Vehicles in Q1 F2013 registering a growth of 37.2% over 5717 vehicles exported in Q1 last year. South America & South African markets continued to extend healthy support to Entity’s products.
After three years of strong growth, the domestic tractor industry witnessed a marginal volume growth of 2.3% in Q1 of the current financial year. In this period, the Entity sold 56861 tractors in the domestic market as compared to 57500 tractors in Q1 last year and its domestic market share for the quarter was 41.5%. The Entity’s exports during the quarter at 3020 tractors, grew by 3.9% over 2908 tractors exported in Q1 F2012.
Q1 F2013 – M&M Standalone results
The Gross Revenues and Other Income of Mahindra & Mahindra Ltd. for the quarter ended 30th June 2012 is Rs.10115.8 crore as against Rs.7318.6 crore during the corresponding period last year – a growth of 38.2%. The Net Profit after tax for the quarter is Rs. 725.6 crore for the current Q1 as against Rs. 604.9 crore in the same period last year – a growth of 20%.
The figures of Q1 last year exclude that of the automotive business of Mahindra Automotive Distributor’s Ltd which, as per the High Court order dated 30th March 2012, merged with the company from the appointed date 1st April, 2011. The growth percentages stated above are, however, not materially impacted by this exclusion.
Q1 F2013 – Group Consolidated Results
The Board meeting to approve the Q1 F2013 results of Tech Mahindra is being held later in the month. After the approval and announcement of its results, the company will separately release the information on Consolidated Group turnover and PAT.
During the current quarter, some of the major group companies like Mahindra Finance, Mahindra Satyam, Mahindra Lifespaces and Mahindra Holidays significantly improved their performance over Q1 previous year. The performance of Mahindra Finance with a 52% growth in consolidated revenues and a 64% increase in profits, Mahindra Satyam with a 31% growth in consolidated revenues and a 56% increase in profits and that of Mahindra Lifespaces with a 28% growth in revenue and a 72% profit growth were particularly noteworthy.
India’s economic performance in the first quarter of the current fiscal has been weak. Industrial volumes were virtually flat; more worryingly, capital goods production witnessed a contraction for the fourth successive quarter, reflecting the weak investment sentiment prevailing in the economy. Inflation, at 7.25% in June 2012, was high and is likely to remain so in the near future, given the poor monsoons this season. Also, despite the 20% drop in the rupee’s value against the US dollar, exports during this quarter were 2.5% lower than the levels registered in April-June 2011. The risks of a full fledged crisis in the euro zone are high and rising, the US economic recovery is looking increasingly more fragile, China is slowing and, given geopolitical tensions in the Middle East, oil markets remain in flux. The drought-like conditions prevailing in several states today has only added to the risks facing domestic companies. Our near term outlook on the economy is cautious and watchful.
Chairman’s Address to the Shareholders at the 66th Annual General Meeting of Mahindra & Mahindra Limited held on Wednesday , 8TH August, 2012
“Welcome to the 66th Annual General Meeting. The Annual Accounts as well as the Notice of the Meeting has been with you for some time, may I take these as read.
I would like to introduce two eminent personalities, who have joined the Board since we last met.
May I present Dr. Vishakha Desai and Mr. Vikram Singh Mehta.
Dr. Vishakha Desai from New York is President and CEO of Asia Society.Dr. Desai holds an M.A. and Ph.D in Asian Art History from the University of Michigan.
Mr. Vikram Singh Mehta is the Chairman of the Shell Group of Companies in India since 1994. He has a Master’s Degree in Politics and Economics (Hons.) from Magdalen College, Oxford University UK and a Master’s Degree in Energy Economics from the Fletcher School of Law and Diplomacy, Tufts University in USA. Welcome to you both.
I am not going to dwell on the details of the year under review, which are exhaustively covered in the Annual Accounts which are with you. However, I do want to stress that it has been a very difficult year and a most challenging one. There have been problems stemming from many circumstances abroad like the state of the sovereign debts of many advanced economies, turmoil in the Middle East, weakening global economic environment and our rising fiscal and current account deficits.
Our currency continues to weaken with a high inflation rate and prolonged uncertainties in respect of our policies and regulations. In spite of this turbulent and uncertain period, our business continued to grow – in the automotive sector, we had a growth of nearly 29%, while in the case of tractors, inspite of the sluggish conditions in the last few months, in the year gone by, the growth was 10%.
We acquired majority holding in South Korean SsangYong Motor Company. We inaugurated our World Class Engineering and Research and Development Centre, the Mahindra Research Valley (MRV) in Chennai. Spread over 125 acres, bearing testimony to our Group’s technology-driven innovations, MRV is the cradle of our future. This facility was created at an investment of 650 crores and presently has a work force of 1500 employees.
At the Board Meeting held earlier today, your Board approved and adopted the Accounts for the first quarter of the current year:
Gross Revenues and Other Income of the Company together with MVML is 10003.9 crores as against 7400.0 crores during the corresponding period last year, showing a growth of 35.2 per cent. The Net Profit of the quarter is 778.5 crores as against 618.3 crores of the corresponding quarter last year – a growth of 25.9 per cent.
Consolidated financials for the Group will be available in a few days after the Board of Tech Mahindra approves their accounts.
The first quarter Auto and Farm sales volumes are as follows.
Your Company recorded total sales of 1,22,571 vehicles, as compared to 95,238 vehicles in the previous year, registering a growth of 28.70% in vehicle sales.
Your Company sold 59,881 tractors under the Mahindra and Swaraj brands, a 0.87% de-growth compared to 60,408 tractors sold during the first quarter of the last year.
These results have been attained through a very disciplined strategy, cutting costs, curbing expenditures, maintaining growth by meeting the ever changing consumer demand. These efforts are reflected in the figures I have just given to you.
However, the economic uncertainties of the year under review aggravated further in the current year, with the Indian economy facing a persistent inflation, a volatile currency, the GDP growth forecasted below 6%, high interest rates, the price of oil remaining high, and the threats by the rating agencies to downgrade the country’s rating.
The risks of a full fledged crisis in Europe remains high, Greece is in a dire state, Spain is showing signs of recession and Italy is showing unacceptable figures of stability. China is showing signs of slowing down; oil markets are in a flux. At the same time, weak domestic macros – high inflation, large fiscal and current account deficits – coalition politics continue to constrain policy actions critical to supporting growth – for any growth below 7% cannot even begin to meet our social needs. Uncertainties of our policies and our vacillation on major reforms together with the south west monsoon remaining weak, adds to our woes!
The future indeed looks challenging, but there is hope that in the latter part of the current year, one might see a change leading to growth and the containment of our revenue and fiscal deficits. I also expect that the Government will move to clarify the uncertainties in many sections of our economy and to bring back focus on providing a platform for the growth of our economy which is critical for bettering the quality of the lives of our people. Towards this effort I make a plea that all of us who are outside the stream of Government must assist and support the policies enunciated and ensure to the best of our ability that all political parties move with one objective of creating an environment in which the economic growth of our country continues.
By now, all of you know that after having enjoyed the privilege of serving as a Director of your Company for 64 years, and the honour of being Chairman of the Board for 48 years, I have decided to hand over the baton to the younger generation.
I wish to convey my sincere gratitude to all of you, the Board of Directors, and to the employees of this Company for making it possible for me to lead the Company over the years, have it grow exponentially and yet stay unflinchingly on the path of sound ethics, inclusiveness and uncompromising integrity, despite the increasingly sullied environment.The affection that you have always showered upon me is embedded in my mind and heart. Yet, it is time to break new grounds.
My innings as your Chairman concludes at the end of this meeting. I am deeply moved by the sentiments expressed by the Board and the Management in requesting me to accept the position of Chairman Emeritus, which I do with humility.
The Board has selected Anand Mahindra to be the next Chairman. As you all know, Anand is a leader of great acumen, moving in step with technological advances and above all, passionate about preserving what is ‘core’ to the Company – integrity, ethics and inclusiveness.”