Financial Daily from THE HINDU group of publications
Tuesday, May 31, 2005
Financial Daily from THE HINDU group of publications Tuesday, May 31, 2005 |
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Corporate Results
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HCV/LCV/Tractors M&M's profit inches up in fourth quarter Our Bureau
Mr Bharat Doshi (left), Executive Director (Finance & Corporate Affairs), Mahindra & Mahindra Ltd, with Mr Alan Durante, Executive Director & President, Automotive Sector, in Mumbai on Monday. - Shashi Ashiwal
Mumbai , May 30 MAHINDRA & Mahindra Ltd has reported a 4.87 per cent rise in profit after tax for the fourth quarter of 2004-05 to Rs 152.7 crore from the previous corresponding Rs 145.6 crore. Net sales/income from operations was up 27.32 per cent to Rs 1,910.7 crore (Rs 1,500.7 crore). For the whole of FY-05, the company registered a 47.12 per cent increase in profit after tax to Rs 512.7 crore (Rs 348.5 crore) on a 34 per cent rise in net sales/income from operations to Rs 6,660.6 crore (Rs 4,970.8 crore). M&M's board has recommended a dividend of 100 per cent and a special dividend of 30 per cent aggregating to Rs 13 per share, a payout of Rs 171.97 crore including tax (Rs 117.79 crore). With FII investment limit in the company touching 31 per cent on a current ceiling of 35 per cent, the board has approved raising that limit further to 49 per cent of paid-up capital. At a press briefing, Mr Bharat Doshi, Executive Director, said M&M's result, including operating margin of 11.57 per cent (10.84 per cent), was despite pressure from input costs. The company looks to FY-06 with cautious optimism. The boards of both companies have decided to merge the de-merged forgings unit of Amforge at Chakan, into Mahindra Automotive Steels Pvt Ltd (MASPL) subject to required approvals. The Chakan unit with forging capacity of 36,000 tonnes, had FY-05 revenues of Rs 210 crore. Valuers have been appointed for the deal and since Amforge shareholders would be given MASPL shares, a public listing of the latter is likely, said Mr Hemant Luthra, President, Mahindra Automotive Systems and Technologies. MASPL, a wholly-owned subsidiary of M&M, is setting up a machining unit, which combined with the merged forgings business, would make it a big integrated forgings company. According to Mr A. Chowdhury, President (Farm Equipment Sector), the company prefers to grow its domestic tractor business organically. "If there is some possible acquisition it would have to be at a good price," he said. Though the structure of the Indian market makes tractor industry consolidation natural, it is understood that M&M's approach on the matter would be shaped by the merit or demerit in balancing more than one brand, high exposure to one market and the price involved. Shares of M&M ended at Rs 494.95 on the BSE, down from the previous close of Rs 502.80.
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