M&M net profit jumps 26%

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.

The company looks optimistic and said that the macroeconomic environment has improved over the last three months. "Global risks to growth have abated for now, bringing considerable relief. Macroeconomic developments on the domestic front have also been equally encouraging," said the company.

M&M's shares fell by 1.4 per cent to close at Rs 882.8 on Friday.

Fast track

* The rise in revenue and profit was largely driven by growth in the auto segment which saw its revenue rise up by 44% Q-o-Q

* M&M also witnessed 28.5% jump in its total income from operations at Rs 10,774 crore

* The company saw its total expenses grow by 28.9% during the quarter at Rs 9,741 crore over the same period last year

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