The Hindu Business Line : M&M Q1 net down 17%

Mumbai, July 30Tractor and utility vehicle major Mahindra and Mahindra reported a 17 per cent fall in the first quarter net profit. According to the company, the fall in profits is mainly on account of exchange loss, and rising input and finance costs.

The net profit dropped to Rs 159 crore in the first quarter ending June 2008 against Rs 191 crore during the year-ago period.

Forex loss

“The lower profits are mainly on account of an exchange loss of Rs 77.9 crore due to rupee depreciation. The profits were also affected by the sharp increase in input cost leading to pressure on operating margin and an increase in finance cost,” the company said in a release here.

The company’s gross revenue grew 26 per cent to Rs 3,749 crore from Rs 2,973 crore during the corresponding period last year.

Sales volume

The company’s domestic MUV sales volumes grew 21.6 per cent. It sold 37,919 MUVs in the first quarter as against the sale of 31,171 units in the same period last year.

In the pick up segment, the company’s volumes registered a 31 per cent growth against the industry average of 13 per cent. In the three-wheeler market, the company’s sales volumes grew 55 per cent to 11,396 units.

Exports

The company exported 3,187 vehicles in the first quarter , which is a 31 per cent growth over exports in the same period last year.

It sold 28,161 tractors in the quarter — a growth of 11.5 per cent over the first quarter of 2008. Its shares closed nearly 3 per cent up on the NSE today at Rs 513.45.

Merger

M&M has decided to amalgamate Punjab Tractors Ltd, in which it holds a 64.64 per cent stake, with itself. Accordingly, shareholders of Punjab Tractors will get one share of M&M for every three shares held by them, the company informed the stock exchanges on Wednesday.