Mahindra & Mahindra (M&M) beats St, sees SUV crowd ahead

Mahindra & Mahindra (M&M), the country’s biggest utility vehicle (UV) and tractor manufacturer, has reported a 1.7% rise in standalone net profit at Rs 889.2 crore as UVs offset fall in tractor sales.

Analysts had expected the company’s net profit to fall 13% on year.

Net sales during the quarter rose 12% to Rs 10,350 crore.

The company sold 72,076 units of UVs during the quarter, a growth of 23% over the numbers sold a year ago.  

“The SUV space will be more competitive with new players entering. But M&M has the strongest portfolio and we are well positioned to take on competition,” said Pawan Goenka, president, farm equipment and automotive sectors for M&M.

“The market share is bound to go down and will be compromised, but we expect the volumes to remain strong,” he said.

M&M’s tractor sales declined to 46,107 units in Q4 as against 48,517 units sold a year ago. While the overall tractor industry degrew 1.7% last quarter, the company expects the demand to revive this year. “We launched 4-5 new products in the tractor space, which will start showing results this year. For this year, we have lined up 3-4 new variants along with an all-new tractor M Star, which will come in the last quarter,” said Goenka.  

The company said an additional duty on UVs imposed in this year’s Union Budget is impacting its sales, which grew just 1% in April.

M&M said sales of SUVs which came under additional 3% duty were down by 14%, while other SUVs which did not attract the duty grew almost 100% during the month.