M&M LATEST RESULT UPDATE: 30 MAY 2017

M&M Q4 profit rises 26% to Rs 874 cr, says FY18 outlook much more robust

Utility vehicle & tractor maker Mahindra and Mahindra has reported a robust 26.3 percent growth in profit at Rs 873.72 crore for January-March quarter year-on-year, saying its FY18 outlook is much more robust. Other income and exceptional gain boosted bottom line.

Revenue during the quarter increased 4.3 percent to Rs 10,612 crore compared with Rs 10,174.58 crore in same quarter last fiscal, impacted by slow volume growth of 2.5 percent.

Its tractor volumes were strong while automotive volumes were under pressure in Q4. The company sold 1.88 lakh units in the quarter ended March 2017 against 1.83 lakh units sold in year-ago quarter.

Tractor volumes increased 16 percent whereas automotive segment showed a 1.7 percent decline in volumes. Tractor segment market share increased 200 basis points YoY in FY17 to 43.5 percent, supported by new product platforms, network improvements and increased collaboration between two brands Mahindra and Swaraj.

"The outlook for 2017-18 is much more robust with a favorable domestic and global backdrop. Monsoon is forecast to be normal for the second consecutive year which bodes very well for demand recovery," the company said in its filing.

These combined numbers are from Mahindra & Mahindra and Mahindra Vehicle Manufacturers.

However, operating profit fell 4.4 percent year-on-year to Rs 1,237 crore and margin contracted by 110 basis points to 11.6 percent for the quarter ended March 2017.

Topline and bottom line were ahead of estimates while operational numbers were in line. According to average of estimates of analysts, profit was estimated at Rs 658 crore on revenue of Rs 10,400 crore for the quarter while operating profit was expected at Rs 1,229 crore with margin at 11.8 percent.

Other income has seen a 3-fold increase at Rs 294 crore against Rs 96 crore while its exceptional gain for the quarter stood at Rs 94 crore against Rs 6 crore in corresponding quarter of last fiscal.

Automotive segment registered a revenue growth of 1.8 percent at Rs 7,613 crore but its EBIT (earnings before interest and tax) fell 24.4 percent and margin dropped 200 bps in Q4

Farm Equipment business grew by 18.3 percent year-on-year to Rs 2,702 crore, with EBIT rising 30.8 percent and margin expansion of 170 basis points during the quarter.

For the financial year 2017-18, M&M's profit jumped 16.3 percent to Rs 3,888.89 crore and revenue increased 7.7 percent to Rs 41,895.4 crore compared with previous year.

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