M&M: The free fall continues - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

M&M: The free fall continues

Oct 30, 2001

Mahindra and Mahindra (M&M) has reported a dismal performance for the quarter ended September 30, 2001. While sales have fallen by 9.4% to Rs 7,611 m, the company has slipped into the red for the second quarter in succession.

(Rs m) 2QFY01 2QFY02 Change
Sales 8,399 7,611 -9.4%
Other Income 242 133 -45.1%
Expenditure 8,006 7,151 -10.7%
Operating Profit (EBDIT) 394 460 16.8%
Operating Profit Margin (%) 4.7% 6.0%  
Interest 162 221 37.0%
Depreciation 339 329 -2.9%
Profit before Tax 135 42 -68.9%
Extraordinary item (33) (84) 152.6%
Tax (30) (15) -50.0%
Profit after Tax/(Loss) 132 (27)  
Net profit margin (%) 1.6% -0.4%  
No. of Shares (eoy) (m) 110.5 110.5  
Diluted number of shares 110.5 110.5  
Earnings per share (Rs)* 4.8 -  

Tractor volumes continue to remain sluggish in light of the slowdown in the economy. The auto companies were hoping for a revival in volumes towards the beginning of the second half in anticipation of a better kharif output. But that has not happened. Tractors division, which contributed to around 44% of FY01 sales, witnessed a sharp slump in demand in 1QFY02. This resulted in a 25.2% drop in overall volumes of the company in 1QFY02. And this seems to have repeated again in the second quarter as well.

Howver, margins have increased by 130 points thanks to the cost cutting initiatives started by the company last year. M&M has embarked on a cost cutting exercise to become more competitive and reduce the impact of weaker demand. The company's overall expenses have fallen by 11% YoY in 2QFY02 due to lower raw material and staff costs (staff costs declined by 8.9% in 1QFY02). The company had offered a voluntary retirement scheme for its workers and staff at all its offices and plants in Mumbai and reportedly, has drawn good response. Though the company would benefit from such cost cutting measures, volume growth in the coming quarters is expected to be modest.

Equitymaster requests your view! Post a comment on "M&M: The free fall continues". Click here!


More Views on News

M&M Announces Quarterly Results (1QFY21); Net Profit Down 95.2% (Quarterly Result Update)

Aug 7, 2020 | Updated on Aug 7, 2020

For the quarter ended June 2020, M&M has posted a net profit of Rs 1 bn (down 95.2% YoY). Sales on the other hand came in at Rs 56 bn (down 56.6% YoY). Read on for a complete analysis of M&M's quarterly results.

M&M Announces Quarterly Results (3QFY20); Net Profit Down 71.5% (Quarterly Result Update)

Feb 10, 2020 | Updated on Feb 10, 2020

For the quarter ended December 2019, M&M has posted a net profit of Rs 3 bn (down 71.5% YoY). Sales on the other hand came in at Rs 123 bn (down 5.5% YoY). Read on for a complete analysis of M&M's quarterly results.

M&M 2018-19 Annual Report Analysis (Annual Result Update)

Jul 9, 2019 | Updated on Jul 9, 2019

Here's an analysis of the annual report of M&M for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of M&M. Also includes updates on the valuation of M&M.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

How Much Money Do You Need to Be a Professional Trader? (Fast Profits Daily)

Sep 17, 2020

In this video I'll answer a question I get asked often: How much capital do I really need to trade the markets for a living? Let's find out...


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 25, 2020 03:36 PM