M&M Q1 net profit down by 6 per cent at Rs 881 crore

Homegrown auto and tractor major Mahindra & Mahindra ( M& M) reported 5.98 per cent decline in its standalone net profit at Rs 881.78 crore for the first quarter ended June 30 on Friday. The auto major had posted net profit of Rs 937.91 crore during the same period a year ago.

Net sales on a standalone basis during the April- June quarter declined marginally to  Rs 10,597.07 crore from Rs 10,607.27 crore, M& M said in a filing with the Bombay Stock Exchange.

During the quarter under review, revenue from automotive segment stood at Rs 5,988.60 crore and that from farm equipment was Rs 3,932.85 crore.

In the June quarter, in spite of the stiff competition, the company sold 52,180 utility vehicles and continued its leadership with the market share of 40.5 per cent. M& M is facing stiff competition from newly launched sport utility vehicles such as Ford India's EcoSport, Nissan's Terrano and Renault's Duster.

The company exported 6,565 vehicles in the quarter under review.

M& M expects the tractor sector, where it is the dominant player, to grow by five per cent in the current financial year down from its previous forecast of eight per cent. " This is a result of delayed monsoon ... and though it has improved a bit but there is already a loss of sowing so we would see less agricultural output this year," said Pawan Goenka, president of automotive and farm equipment sectors.

Mahindra's tractor sales went up by one per cent in the April- June quarter. Goenka said that if the recent pick- up in monsoon continues, as forecast by weather experts, the second half of the year could see better growth.

Afer two consecutive years of decline, sales of passenger cars in India are expected to grow between 5- 10 per cent this fiscal.

Mahindra also plans to launch three passenger vehicles and two commercial vehicles over the next 15 months in an attempt to win back sales and market share.

In association with Mail Today Bureau