Mahindra and Mahindra Q1 net profit declines 5.98 per cent on higher costs

Mahindra and Mahindra, India's top utility vehicle maker, has reported a 5.98 per cent decline in its standalone net profit at Rs 881.78 crore for the first quarter ended June 30, 2014.

The auto major had posted a 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, Mahindra & Mahindra said in a filing to 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. It was Rs 5,980.62 crore and Rs 3,899.52 crore respectively in the year-ago period.

"The automotive industry in India is currently facing very challenging times. In the June quarter, in spite of the stiff competition, the entity sold 52,180 utility vehicles and continued its leadership with the market share of 40.5 per cent. The entity also exported 6,565 vehicles in the quarter under review," the company said.

On the farm equipment segment sales, the company said crop damage due to unseasonal rains in some parts of India in March coupled with deficient monsoon in June led to marginal degrowth of 1.2 per cent in the domestic tractor industry in Q1 of 2014-15.

"In this period, the entity sold 72,166 tractors in the domestic market as compared to 71,696 units sold in Q1 of the previous year," it added.

On the outlook, Mahindra and Mahindra said the economy has been displaying some positive trends but if the south west monsoon continues to be weak, it would impact both inflation and consumer demand negatively in the near term.

Shares of the company were trading at Rs 1,232.10 per scrip on BSE during the afternoon trade, down 1.18 per cent from the previous close.