Mahindra & Mahindra today announced the financial results for the quarter and fiscal year ended March 31, 2016 for the company and the consolidated Mahindra Group.
30 May 2016 | 2326 Views | By Shourya Harwani
Led by a 14% increase in its automotive sales, Mahindra & Mahindra today reported a 6% rise in its standalone net profit at Rs 583.73 crore for the fourth quarter ended March, 2016.
The utility vehicle manufacturer had posted a net profit of Rs 550.56 crore in the January-March period ...
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Led by a 14% increase in its automotive sales, Mahindra & Mahindra today reported a 6% rise in its standalone net profit at Rs 583.73 crore for the fourth quarter ended March, 2016.
The utility vehicle manufacturer had posted a net profit of Rs 550.56 crore in the January-March period of 2014-15.
For Q4 F2016, the passenger vehicle market grew 2.5% with the Utility Vehicle segment growing 15.2% on back of new launches and urban demand. The M&HCV goods segment continued to grow on back of replacement demand, improvement in industrial activity and movement in infrastructure projects, M&M said.
The company's automotive division sold a total of 140,509 vehicles during the quarter under review, with a growth of 14%. Meanwhile, the farm equipment division also saw a turnaround in sales which grew 12% on year to 43,415 units.
According to the company, it witnessed a double digit growth in combined sales of automotive and farm equipment sectors after 16 quarters.
In the Utility Vehicle segment, the company sold a total of 69,082 vehicles in Q4 F2016, a year-on-year growth of 21.1%. In January 2016, the company had launched its compact SUV, the KUV100 powered by the all-new mFALCON family of petrol and diesel engines, which marked Mahindra’s entry into the petrol space. M&M also maintained its leadership position in the Pick-Up (LCV 2- to 3.5T) segment with a 66.6% market share and continued to be the largest player in the small commercial vehicle ( < 3.5T GVW) segment with a market share of 49%. Within the FES segment, the company sold 41,129 tractors in Q4 2016 in the domestic market registering, a growth of 18.6%.
Outlook
M&M says while the macroeconomic environment in India continues to improve, the pace of growth recovery has, thus far, remained modest and patchy. With external demand remaining sluggish, a rural economy battered by two consecutive drought years, gridlocked infrastructure projects and, a private corporate sector reeling under the burden of slowing sales and rising balance sheet stress, urban consumption demand, foreign direct investments and public capital expenditure were the only drivers of growth left standing through most of the year.
Recent data indicators, however, suggest that a turnaround may be in the offing with the country likely to experience a stronger, more broad-based economic recovery through 2016-17. For one, infrastructural activity, particularly in the power and road sectors, registered a smart pick up in in the last quarter of 2015-16 indicating that the government’s focused policy efforts in this space are finally beginning to bear fruit. Rising bitumen production, cement dispatches and freight rates attest to the same. Second, growth in domestic sales of motorcycles and tractors turned positive this past quarter, suggesting that the rural economy may now be stabilising, albeit at a low level. With a robust monsoon season predicted for this year, rural demand will, in all likelihood, pick up pace in the coming quarters. Also, with both infrastructural activity and consumption demand gaining strength, balance sheet stresses in the corporate sector are likely to wane, setting the stage for a revival in domestic private sector investment by the year end.