Tractor and utility vehicle major Mahindra & Mahindra posted net profit (standalone) of Rs. 725 crore, a 20 percent YoY growth. Gross revenue and other income during the period stood at Rs. 12320 crore. For the financial year 2016-17, gross revenue and other income stood at Rs. 48439 crore, a 9 percent YoY growth, and net profit was Rs. 3956 crore, a 23 percent YoY growth.
30 May 2017 | 4485 Views | By Autocar Pro News Desk
Tractor and utility vehicle major Mahindra & Mahindra posted net profit (standalone) of Rs. 725 crore, a 20 percent YoY growth. Gross revenue and other income during the period stood at Rs. 12320 crore. For the financial year 2016-17, gross revenue and other income stood at Rs. 48439 crore, a ...
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Tractor and utility vehicle major Mahindra & Mahindra posted net profit (standalone) of Rs. 725 crore, a 20 percent YoY growth. Gross revenue and other income during the period stood at Rs. 12320 crore. For the financial year 2016-17, gross revenue and other income stood at Rs. 48439 crore, a 9 percent YoY growth, and net profit was Rs. 3956 crore, a 23 percent YoY growth.
According to the company, the Supreme Court order stopping registration and sales of BS III vehicles from April 1has led to an adverse impact of Rs. 171 crore. The company has earmarked Rs. 750 crore for investments to be BS VI ready before April 1, 2020.
The company benefitted from the auto industry recovering in Q4 after the negative impact of demonitisation in Q3, but says that the continued lag in the LCV segment of below 2 tonne, 3 wheelers and 2 wheelers is an indication of a slower recovery in rural parts of the country. Along with demonitisation, the lowdown of demand for diesel passenger vehicles also affected M&M's market performance.
The tractor industry posted recovery, albeit partially, in Q4 F2017 by registering a growth of 13%. The farm equipment industry grew 18 percent during FY 17 after two years of slowdown. M&M grew 13 percent during this period, pushing its market share up by 1.8 percentage to 42.7 percent. Tractor demand picked up in March owing to the festive demand and the positive momentum created by good crop production in the rabi season. The positive sentiment fueled by expectation of good monsoons, higher rural incomes and, a government thrust in agricultural and rural sectors would bode well for M&M's volumes in Q1 of the current financial year.
The company has shared a 'more robust' outlook for 2017-18 with a 'favourable domestic and global backdrop'. It says the domestic economy is set to experience a growth recovery and while the RBI expects GVA to grow at 7.4 percent YoY in FY 18 with some favourable tailwinds, the recent revamp of the IIP and WPI series may well propel it higher towards 8 percent. Moreover, the ongoing remonetisation process and lagged effect of past rate cuts along with a further reduction in banks’ lending rates will aid discretionary consumer spending and growth recovery.
On the global front too, demand backdrop is expected to be favourable with most forecasts pegging global output and trade higher in 2017 and 2018 as compared to the recent past.
The company is also looking at setting up a second base outside India, It would be either in the ASEAN region or Africa. M&M's PV segment will see five car launches this year including two to three refreshed versions.
M&M has a capex plan of Rs. 7500 crore for the FY 18 to FY 20 period.