At a time when the auto industry is going through a deterrent downturn, Mahindra has managed to sustain growth in its first quarter profits...
At a time when the auto industry is going through a deterrent downturn, Mahindra has managed to sustain growth in its first quarter profits in the current fiscal year. The company (Mahindra + MVML) has recorded a healthy year-on-year (YoY) growth of 80 per cent in profit after tax (PAT) and after exceptional items (EI) at Rs. 2260 crore as compared to Rs. 1257 crore which it recorded in the first quarter last year. However, a massive gain of Rs. 1367.05 crore from exceptional items has added to the overall PAT, helping the growth. The one time gain is attributed to the sale of shares of M&M Benefit Trust and buyback gains on transfer of long term investments.
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If we exclude exceptional items, the company's PAT has witnessed a decline of 26 per cent at Rs 918 crore in Q1 FY2020 as compared to Rs. 1238 crore which it recorded in the same period last year. Mahindra's total revenue (revenue from operations + other income) in the first quarter of this fiscal year is Rs. 12,997 crore which is a de-growth of 4 per cent when compared to Rs. 13, 551 crore which it recorded in the Q1 FY2019. Its operating margin (OPM) has also slipped to 14 per cent from 15.8 per cent.
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In the same quarter, the company has sold 123,690 passenger vehicles as compared to 130,484 PVs which were sold in Q1 last year which is a sales decline of 5 per cent. Sales in the farm sector (Tractors) slumped by 15 per cent at 82,013 units compared to 96,527 units which were sold in Q1 FY2019. Mahindra's exports in the same period have gone down by 14 per cent at 10,923 units as compared to 12,730 units which it exported in the same period last year.
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