Comments
Mahindra & Mahindra reported 33.29 per cent increase in standalone profit after tax at ₹1,112.27 crore for the third quarter ended December 31, 2016, driven by an exceptional income of ₹363.78 crore on account of sale of investment in group firms. However, vehicle sales were badly hit due to demonetisation.
M&M sold 1,12,852 vehicles during the third quarter, down 8.3 per cent from last year. Utility vehicles sales stood at 51,772 units, down 11.7 per cent, while that of tractors stood at 72,363 units, up 20.8 per cent.
Total income from operations during the third quarter rose only 1.47 per cent to ₹ 11,777.98 crore, largely impacted by the demonetisation of currency notes.
“The pressure on volumes will remain in Q4, but not in all segments,” said Pawan Goenka, Managing Director.
Revenue from the automotive segment during the quarter stood at ₹7,453.08 crore, a decline of 7 per cent compared with ₹8,017.18 crore in the same quarter a year ago. Revenue from farm equipment was ₹4,322.14 crore, up 20.3 per cent in the third quarter, against ₹3,592.74 crore in the year-ago period.
M&M said an exceptional item of ₹363.78 crore for the quarter represents the net profit on sale of investment in subsidiary companies and a joint venture.
Mahindra said the festival season in October helped in boosting demand for tractor but overall third quarter saw some pressure on volumes due to demonetisation.
“India’s macro momentum suffered a dislocation in the form of withdrawal of high frequency notes by the government in November with discernible impact on consumption and investments. Demonetisation has had short-term costs but holds the potential for long-term benefits,” the company said in a statement.
Nasik project In a separate statement, Mahindra announced its plans to invest ₹1,500 crore in Nasik Project for the next phase of expansion, which constitutes development and manufacture of its new MPV codenamed U321. The investment will cover expansion at Nasik and Igatpuri facilities.
“The project will create an additional combined capacity of 50,000 at both the plants and create over 800 jobs,” Goenka said.
The investment in the Nasik plant will be towards manufacture of vehicles, while investment in the Igatpuri plant will be for manufacture and supply of engines.
The company’s scrip closed at ₹1,278.05, down by 1.08 per cent, on the BSE on Friday.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.