M&M net profit jumps 26%
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Led by a strong growth in sales in its automotive segment, Mahindra & Mahindra announced a 26.3 per cent year-on-year jump in its net profit for the quarter ended December 2012 at Rs 836.2 crore. The company also witnessed 28.5 per cent jump in its total income from operations at Rs 10,774 crore.
The rise in revenue and profit for the company was largely driven by growth in the automotive segment which saw its revenue rise to Rs 7,360 crore up by 44 per cent over the corresponding quarter. The profit before tax from the segment rose by 49.6 per cent Rs 625.4 crore for the quarter ended December 2012 up from Rs 418 crore in the same period last year.
During the quarter, while the industry faced pressure on sales, M&M sold 70,483 vehicles in the passenger utility vehicle segment thereby registering a growth of 36 per cent over Q3 2011-12. It continued to maintain its leadership in the segment with a market share of 47.9 per cent.
"The growth in profits of the company despite relentless increase in material costs is due to a good volume performance by automotive sector and tight control on expenses," said M&M adding that all products in the UV portfolio continued to do well.
The company saw its total expenses grow by 28.9 per cent during the quarter at Rs 9,741 crore over the same period last year. Market experts, however, see the results as below expectations. "M&M 3QFY13 results were below estimate, negative surprise were both on realisations and auto margins. Going forward volume pick up in tractors and UV would be the key to watch out for," said Rikesh Parekh,VP-equities, Motilal Oswal Financial Services.
The growth in the farm equipment segment was muted as the revenues and profits before tax rose by 4.8 and 3.8 per cent respectively.
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