Tractor and utility vehicle (UV) major, Mahindra & Mahindra (M&M), has posted Rs 778 m net profit in 3QFY2000.
M&M is the leader in the utility vehicle segment (61% market share in October 1999) and the tractor segment (29% market share). It is also engaged in the manufacture of light commercial vehicles (LCV). In addition to the automobile segment, the M&M group also has interests in information technology (IT) and realty.
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M&M has registered 38% net profit growth in 3QFY2000. The 38% (year-on-year) net profit growth is arrived at after taking into effect the one-time Rs 104 m payment made by Ford to M&M in 3QFY1999.
The company's operating margins have improved largely due to a 16% increase in vehicle volumes. The company also reaped the benefits of a positive model mix. Sales of higher margin vehicles like the 45HP tractor improved in 3QFY2000 . Sales of M&M's new models are also picking up. M&M is buying back the balance US$ 28 m foreign currency convertible bond (FCCB) which will reduce interest burden in the following quarter.
However, there are some concerns about the strike at the company's Kandivli tractor plant. This had an adverse impact on the company's Nagpur unit as well as some components for the Nagpur plant are sourced from Kandivli.
Analysts have flagged a Buy on M&M due to improvement in 3QFY2000 operating margins, success of new models and the potential of the company's software venture - Mahindra British Telecom, in which M&M holds 60% stake.
Mahindra & Mahindra has announced its financial results for the second quarter of the financial year 2016-17 (2QFY17). During the quarter, revenues grew by 15.6% YoY and adjusted net profits grew by 18.5%.
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