Mahindra & Mahindra plans to invest Rs 15,000 crore in next three years

Mahindra & Mahindra (M&M) plans to invest about Rs 15,000 crore for product development, capacity expansion and investment in other companies in the next three years.

The company will not hesitate in raising the planned investment further if the situation demands, a senior company executive said on Tuesday.

It had last year indicated an investment of Rs 12,000 crore for fiscals 2017-2019.

Pawan Goenka, managing director, M&M, at a press meet to announce the latest quarter results, said there was a spike in capital expenditure as some initiatives were new and not in the plan earlier.

M&M on Tuesday posted a 50% year-on-year jump in net profit to Rs 1,155 crore for the quarter ended March 31, 2018. Revenue and other income rose 24% to Rs 13,355 crore in the reporting quarter. For the year ended March 31, 2018, the company posted a net profit of Rs 4,623 crore, up 18% over 2016-17. Full-year revenue rose 14% to Rs 48,529 crore over 2016-17.

The company sold 1,56,453 vehicles in the latest fourth quarter, about 20% more than 1,30,778 units sold in the year-ago period. It sold 66,885 tractors during the period under review, up 44%, from 46,583 units in same period of previous fiscal. The company exported 12,459 units during the fourth quarter, a year-on-year jump of 14 %.

"The improvement in overall economic sentiment, two consecutive years of normal monsoon, government's focus of agriculture and rural sectors with continued investment in infrastructure, coupled with easy availability of affordable finance, helped drive the demand for the automotive as well as the tractor industry," said the company in a statement.

The management expects a rise in commodity price and capacity constraint due to the rising demand as some of the constraints in this fiscal. The commodity pricing is plateauing at the movement after seeing a high in past few quarters, the official said.

Goenka added that while the increase in commodity prices is a cause for concern, the capacity constraint arising out of a spike in demand "is a good problem to have after so many years". He said that the company is working to meet the demand by increasing the capacity, but if the demand increases beyond the planned capacity then it may pose a challenge. "However, history has shown me that plants always find a way to meet the demand," he said.

VROOM STREET

• The company sold 1,56,453 vehicles in the latest fourth quarter, about 20% more than 1,30,778 units sold in the year-ago period
   
• It sold 66,885 tractors during the period under review, up 44%, from 46,583 units in same period of previous fiscal
   
• Mahindra & Mahindra exported 12,459 units during the fourth quarter, a year-on-year jump of 14%

(With inputs from PTI)