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Tuesday, Jun 18, 2002

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Mahindra net dips 15% to Rs 103 cr

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MUMBAI, June 17

MAHINDRA & Mahindra Ltd (M&M) has reported a 14.81 per cent reduction in net profit to Rs 102.69 crore for the year ended March 31, 2002, from the previous corresponding Rs 120.55 crore.

Including adjustments pertaining to previous years, the balance of profit for fiscal 2001-02 settles at Rs 96.91 crore. The company's board has recommended a dividend of Rs 5 per share, absorbing a sum of Rs 56.21 crore.

Net sales/income from operations, including a credit arising out of renegotiation of an operations agreement with Ford India Ltd, was down by 7.49 per cent to Rs 3,273.08 crore (Rs 3,538.40 crore for the year-ago period). There has been a 3.84 per cent rise in promoter's stake, given the marginal fall in non-promoter shareholding at M&M to 74.01 per cent (77.91 per cent).

For Q4 2001-02, M&M reported a 234.34 per cent rise in net profit before previous years' adjustments to Rs 97.93 crore (Rs 29.29 crore for the year-ago period), on net sales/income from operations of Rs 909.06 crore (Rs 945.09 crore). On the BSE on Monday, M&M's stock gained marginally by 70 paise from Friday's level, to close at Rs 110.

After adjusting interest income of Rs 32.97 crore (Rs 50.56 crore), net interest for the just-ended fiscal registered a 33 per cent rise to Rs 82.66 crore (Rs 62.15 crore).

"This is because the interest earned has gone down due to a fall in surplus funds, courtesy investments made in Project Scorpio and other projects,'' Mr Bharat Doshi, Executive Director, M&M, said. Investment in Project Scorpio, involving the development of a new MUV platform, is estimated at Rs 550 crore.

Loans worth Rs 140 crore were either prepaid or had their interest rates renegotiated, in 2001-02. Notwithstanding this, another senior company official familiar with M&M's finances said, total borrowings on a year-to-year basis would have gone up, as loans were additionally availed last year for purposes such as the voluntary retirement scheme.

"But we were able to borrow at attractive rates and gross interest has risen by only Rs 2-3 crore," he said, highlighting the dip in interest earned which drove up net interest.

The average cost of long-term borrowings as at last fiscal's close was 11.4 per cent.

Though the forex component of debt could not be had, he pointed out, the entire principal amount involved was adequately hedged. M&M's debt-equity ratio was 0.87.

Segment-wise, M&M's automotive segment contributed Rs 1,827.54 crore as revenue and Rs 111.36 as PBIT in 2001-02, the same for its farm equipment segment being Rs 1,402.42 crore and Rs 83.55 crore, respectively.

Of the Rs 1,779.52 crore total capital employed, Rs 1,053.43 crore was for the automotive business, Rs 673.48 crore for the farm equipments business.

M&M's tractor sales in FY2002 dropped to 58,006 units (79,237 units) with a market share of 26.2 per cent. However, tractor exports for the period rose by 77 per cent to 3,521 units (1986 units).

In MUVs, the company sold 55,920 units taking its market share to 47.5 per cent (46.2 per cent). Market share in LCVs improved to 11.5 per cent (11 per cent) while in three-wheelers, sales numbers rose to 2,950 units (191 units), an official statement said.

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