Mahindra reported a 24.8 percent rise in net profit at Rs. 1,331.57 crore for the three months to September, boosted by higher tractor sales following normal monsoon and good festival demand for its automotive vehicles which pushed up its margins.
Revenue rose to Rs. 12,182.07 crore from Rs. 11,446.14 crore a year ago,the utility vehicles major said.
“It was a very good quarter from operational and financial performance point of view. A normal monsoon and an exceptionally good festive demand for tractors helped the numbers. There was also a reasonably good demand for automotive business,” Mahindra & Mahindra managing director Pawan Goenka said.
He said during the quarter, the company clocked the highest operating margins for both tractor and automotive businesses.
During the quarter, the company sold 1,29,754 units of which tractor volumes stood at 76,984 units including exports of 11,755 units.
In the festival month of September, the company sold the highest number of Scorpios since the launch of its flagship SUV and has also strengthened the UV portfolio with variants of TUV300 in September and a KUV100 in October.
Truck sales too matched with a volume of 2,079 units, a growth of 86 per cent over the previous year, it said.
On the outlook, Goenka said, “right now there is nothing that concerns us. Growth momentum is likely to witness a cyclical bounce back once the effects of some of the recent transient factors fade away and the economy adjusts to GST.”
Stating that the days of 20 per cent growth are behind the industry, Goenka said 6-8 per cent growth is good enough given the present market conditions.
Exuding confidence that growth would continue, he said they have a robust product pipeline and going forward volumes will be driven by new launches and refreshes.
On supplying 150 e-vehicles to the EESL, Goenka said the first batch of the e-Veritos will be dispatched on November 12 and the entire order will be completed in phased manner within the November 30 deadline.
Soon after accepting the EESL order to sell e-cars, Goenka had said that they would lose money on every one of the 150 cars. M&M was had originally quoted Rs 2.3 lakh more than the winning of Tata Motors but later matched the winning price point.
Goenka was quick to point out that for the e-vehicles to gain traction, demand needs to be built by building supporting infrastructure which can bring down cost. He expects a substantial penetration of EVs over the next two- three years if the prices come down.
He said the company has put on hold its plans to bring the scooters from its French arm Peugeot Motorcycles into the domestic market. But he was quick to add that business continues to grow in other markets. Mahindra owns 51 per cent stake in the French two-wheeler maker.
Mahindra will also announce its plans to open an assembly plant in the Detroit area of the US by November 20, he added.