Mahindra and Mahindra’s one per cent growth in net sales to ₹10,857 crore in the quarter ended December 2016 has predominantly been supported by the farm equipment division.

While the automobile segment revenues plunged by 8 per cent during the quarter (over the same period last year), the farm equipment segment, which contributes to about two-fifths of the company’s topline, posted a 20 per cent growth in revenue.

Even though tractors sales volumes plunged by 24 per cent in November 2016 (over November 2015) post the demonetisation announcement, the strong 61 per cent growth in volumes seen in October and the slight pick-up in volumes in December, aided the top-line.

The festival season in October, good monsoon, higher rabi sowing this year and a hike in minimum support prices for oilseeds and pulses seems to have aided sentiments here.

With the farm division being more profitable, the higher sales here helped maintain the overall operating margins for the company at 13.8 per cent – the same level as last year.

The farm division margins expanded by 200 basis points to 17.5 per cent in the three months ended December 2016; the auto segment margins plunged by about 300 basis points year-on-year to 7.1 per cent in this quarter.

The weaning off of excise benefits for the Haridwar plant is among the major reasons for this shrinkage.

At the net profit level, the company was helped by an exception income to the extent of ₹16.5 crore from sale of investment in subsidiary/joint venture.

Thus, the fall was contained to about 5.6 per cent from the ₹849-crore posted in December 2015 quarter.

With upcoming petrol vehicles, new launches and refreshes in the auto segment and the pat for rural India in the Budget, the company is expected to fire on all cylinders in the coming months.

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