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M&M net down to Rs 350 million in Q1

Mahindra and Mahindra Limited has posted a net profit at Rs 350.2 million for the first quarter ended June 30, 1998, registering a decline of Rs 84.2 million against Rs 434.4 million recorded in the corresponding period last year.

According to unaudited results of the multi-uitility vehicle major, the sale (net of excise) and income from operations for the quarter are Rs 8.08 billion as against Rs 7.83 billion for the corresponding quarter last year - an increase of 3.3 per cent. The profit before depreciation, interest and tax stood higher at Rs 1.11 billion as compared to Rs 1.08 billion.

The depreciation was higher at Rs 272.5 million as against Rs 206.6 million and the interest at Rs 366.7 million as against Rs 280.3 million, consequently, profit before tax amounted to Rs 470.2 million as against Rs 594.4 million for the corresponding period last year, a company release stated.

The board of M&M announced the unaudited results of the company for the first quarter here today.

The sale of vehicles during the quarter inclusive of packs and exports, was 15,784 units as against 16,502 units in the corresponding quarter. During the quarter, the automotive industry witnessed a high rate of deceleration in the market demand for utility vehicles of around 17 per cent.

The company has, however, successfully contained the impact this adverse trend to a moderate level of around 4 per cent. The company's market share of utility vehicles improved to 56.7 per cent during the quarter as against 51.7 per cent for the year ended March 31, 1998.

Reacting to the company's performance, the M&M scrip on the BSE opened higher at 161, touched the day's high of 162.50 and ended at 157, showing a loss of Rs 2.50 against the previous close of Rs 159.50.

The company's market share of tractors during the quarter was 27.7 per cent as against 27.1 per cent for the full year ended March 31, 98. The sale of tractors during the quarter was 17,138 units as against 18,500 units during the corresponding quarter last year a decrease of 7.4 per cent.

The negotiations with the workmen's union at the tractor plant at Kandivli, Mumbai, had continued during a major part of the quarter and reached a successful conclusion on May 26, 1998. Sales during the quarter were constrained due to tractor production levels not attaining the full potential during the period of negotation in April and May.

With the implementation of Agreement, production volumes are now being ramped up and it is expected that the full benefits of the increased productivity will be realised progressively over the next few months. This would enable the company to fully exploit the increased market demand, the release stated.

UNI