Free Press Journal

Mahindra posts marginal rise in net at Rs 897 cr on tax gains


Mumbai: The country’s largest utility vehicles maker, Mahindra & Mahindra, today reported a marginal rise in standalone net profit at Rs 896.9 crore for the three months to March, up from Rs 889.2 crore, propped up by a one-time tax gain.

The tax gain of about Rs 300 crore came from the merger of the truck and bus arm with the parent company.

Net sales rose to Rs 10,838 crore from Rs 10,353.38 crore, Pawan Goenka, president for the automotive business, told reporters. He attributed the profitability to better sales in pick-ups, which grew 17 per cent during the year while utility vehicle sales declined 3 per cent, reflecting the overall industry decline.

Goenka said the passenger car industry had the worst show in over three decades last year, with industry-wide sales declining 9.5 per cent.

M&M’s market share in the utility vehicle segment was yanked down to 43.3 per cent at the end of March as the large utility vehicles lost ground to compacts, which now command over 55 per cent of the market, up from 35 per cent a year ago.

For the full year, its utility vehicle sales dipped 3 per cent, after bad second and third quarters.

Goenka said the company will launch two compact utility vehicles next year to fill this gap as its compact model Quanto has been losing ground.

Group Chief Financial Officer V S Parathasarathy said with the merger of Mahindra Truck & Bus, which was completed in the reporting quarter, the company could net a one-time taxgain of about Rs 300 crore, which helped the company to report overall gains in net income.

Another reason for the marginal rise in net income was the loss on account of the excise duty cut announced in February, the CFO said.