Mahindra & Mahindra rose 2.17% to Rs 878.80 at 14:32 IST on BSE after the company announced good Q1 June 2013 results during trading hours today, 13 August 2013.
Meanwhile, the BSE Sensex was up 188.30 points, or 0.99%, to 19,135.28
On BSE, 2.23 lakh shares were traded in the counter compared with average volume of 1.48 lakh shares in the past one quarter.
The stock hit a high of Rs 897.85 and a low of Rs 870 so far during the day. The stock hit a 52-week high of Rs 1,026.45 on 20 May 2013. It hit a 52-week low of Rs 730.55 on 13 August 2012.
The stock had outperformed the market over the past one month till 12 August 2013, falling 5.02% compared with the Sensex’s 5.07% decline. The scrip had, however, underperformed the market in past one quarter, sliding 11.21% as against Sensex’s 5.84% fall.
The large-cap company has an equity capital of Rs 307.94 crore. Face value per share is Rs 5.
The gross revenues and other income of Mahindra & Mahindra (M&M) and Mahindra Vehicle Manufacturers Limited (MVML) (entity) in Q1 June 2013 was Rs 10801.50 crore as against Rs 10003.90 crore in the previous year – a growth of 8%. The net profit before tax for the current quarter was Rs 1214.1 crore as against Rs 1049.8 crore in Q1 June 2012. After providing for tax, the same was at Rs 909.70 crore against Rs 778.50 crore in Q1 June 2012 – a growth of 16.9%.
M&M said the good growth in the profits of the entity in the quarter is due to a good volume performance by farm equipment sector and tight control on expenses. The operating margin of the entity was 14.4% in Q1 June 2013 compared with 13.9% in Q1 June 2012.
MVML located at Chakan near Pune, was set up as a 100% subsidiary of the company with a view to sourcing contemporary products for expanding the market offerings of the company. Hence it is a critical part of its business and only the combined results of the company and MVML can provide a comprehensive view of company’s performance.
M&M said that that automotive industry in India has been facing challenging times in the recent past and in Q1 June 2013 the industry shrank by 2%. In the current quarter, the entity sold 56,969 passenger utility vehicles and continued its leadership position with a market shares of 46%. In the cars segment, tne entity launched the Verito Vibe – a variant of the Veroti car. Verito and Verito Vibe together had a combined volumes sales of 3255 cars. The entity also exported 4771 vehicles in the current quarter.
The company added that the domestic tractor industry witnessed strong growth in Q1 June 2013. In this period, the entity sold 71,696 tractors in the domestic market as compared to 56,861 tractors sold in Q1 June 2012, a growth of 26.1%. The market share of the entity in the quarter was 41.4%. The entity’s exports during the quarter at 3187 tractors, grew by 5.5% over 3020 tractors exported in Q1 June 2012.
The consolidated gross revenues and other income of the M&M group grew by 9.5% to Rs 19356 crore in Q1 June 2013 over Q1 June 2012. On account of a change in the status of Tech Mahindra from a joint venture to an associate, effective 31 August 2012, the revenues reported above include M&M’s share of Tech Mahindra revenue only in Q1 June 2012. On a like to like basis, the growth in the consolidated revenue was 14.3% in Q1 June 2013 over Q1 June 2012. The consolidated profit after tax before minority interest rose 22.6% to Rs 1249.90 crore in Q1 June 2013 over Q1 June 2012. After deducting minority interest, the profit after tax for the current quarter was reported at Rs 1164.60 crore compared with Rs 1026.40 crore in Q1 June 2012.
The group’s recent acquisition Ssangyong Motor Company, South Korea, with a 26.8% growth in consolidated revenues and a 138% growth in results, broke even for the first time since its acquisition in March 2011 and returned a profit after tax of Rs 41 crore. The performance of Mahindra Finance with a 32% growth in consolidated revenues and a 18% increase in profits, and that of Mahindra Lifespaces with a 44% growth in consolidated revenues and a 13% growth in profits, were also noteworthy, M&M said in a statement.
In another significant development during the current quarter, with the Andhra Pradesh High Court delivering a favorable order on 11 June 2013, Tech Mahindra successfully completed the merger of Mahindra Satyam with itself to become the fifth largest IT company in the country. The group at the end of the quarter comprised of 128 subsidiaries, 6 joint ventures and 11 associates, M&M said.
In its outlook, M&M said the general economic outlook was quite positive in April this year. However, with the current account deficit of 4.8% of GDP in the year ended March 2013, the key risk to this outlook stemmed only from the country’s exposure to volatility in global financial markets. Unfortunately, with US Federal Reserve announcing a tightening of its monetary stance in May, that risk materialised. Portfolio flows to India have now reversed direction, leading to a sustantial and sharp weakening of the Indian rupee, with significant negative implications for most other macro-stability indicators like fiscal balances, inflation, etc. On the flip side, abundant rains setting the stage for a sharp rise in agriculture output and incomes this year and, a weaker currency, coupled with steady recovery in developed markets leading, potentially, to pick-up in export momentum. Nevertheless, as a fair degree of macroeconomic turbulence in the near term seems inevitable, the company, at this point, maintains a cautious and watchful outlook on the economy.
Source : Lokesh Shastri