Indian utility vehicle manufacturer Mahindra & Mahindra has registered a 77.6 per cent rise in the third-quarterly standalone net profit. Mahindra has reported a net profit of Rs 734.7 crore for the quarter ended December 31, in comparison to Rs 413.7 crore in the same quarter a year ago. Financial analysts were projecting the net profit to be in the range of Rs 630-680 crore.
“The growth in the profit of the company despite the relentless increase in material costs is due to a good volume performance by both vehicles and tractors, tight control on expenses and prudent financial management resulting in lower interest costs,” said the Mumbai-based company.
The rising costs of steel, rubber and other raw materials used to make vehicles and components have affected the profit margins of many automotive companies in India. India’s largest car maker, Maruti Suzuki India had suffered a decline of 18 per cent in net profit for the same quarter recently.
Net sales of Mahindra grew by 35.6 per cent to Rs 6,074 crore for the reporting period, against Rs 4,478 crore posted in the corresponding quarter last year.
A Mumbai-based analyst said, “Better cost reduction initiatives and better than expected sales realisation have boosted margins of the company. However, the extent to which the company has revised its prices upwards may not be enough to cover for the rise in raw material prices.”
M&M recently launched its pick-up truck, and promises to launch many more models in the coming months. The company presently has a share of 62 per cent in the domestic market.