The Hindu Business Line : M&M net profit up on auto boom, tractor sales

MAHINDRA & Mahindra Ltd (M&M) has reported a 139 per cent rise in profit after tax for the year ended March 31, 2004, to Rs 348.54 crore as against the previous corresponding Rs 145.53 crore. Same time, net sales/income from operations gained by 32.87 per cent to Rs 4,959.10 crore (Rs 3,732.12 crore for the year ago period).

``The improvement in profits is due to an excellent volume performance by the automotive sector, a smart recovery in the sale of tractors and continued focus on cost control measures,'' an official statement said. According to it, industry sale of tractors in Q4 of 2003-04 fiscal rose by 43 per cent to 61,401 units (43,000 units), that of M&M's growing by 50 per cent to 15,066 units (10,049 units) for the same period.

The company's board has recommended a dividend of Rs 9 per share (Rs 5.50) which will absorb a sum of Rs 117.79 crore including tax (Rs 71.98 crore). At the BSE, M&M's stock ended down Rs 8.85 at Rs 420.40.

FY04 interest outgo dropped to Rs 51.58 crore (Rs 86.89 crore) while depreciation was steady at Rs 165.19 crore (Rs 165.43 crore).

Last fiscal, M&M's vehicle sales (including 3-wheelers) crossed the 100,000-mark and touched 117,386 units. This was a growth of 35 per cent over previous fiscal's volume. Utility vehicle volumes grew by 34 per cent to 91,434 units (68,852 units). Tractor sales for the year amounted to 49,576 units (47,028 units).

On outlook, M&M's statement said, ``The economy is on a robust momentum of growth which augurs well for the automotive and tractor industries. With the change of government, there could be a shift in priorities and announcements so far made point towards accelerating investments in the agriculture and infrastructure sectors.

``This would bring consequential benefits to the company as the basic thrust of its business is towards rural and semi-urban markets.''

During the fourth quarter, the company reported a higher net profit of Rs 145.64 crore as compared to Rs 48.68 crore in the year-ago period. Net sales increased to Rs 1,520.03 crore from Rs 1,123.05 crore in the year ago period.