Mahindra & Mahindra Apr-Jun quarter standalone net profit down 20% to Rs 766 cr
Revenue from operations during the first quarter of 2017-18 stood at Rs 12,335.56 crore, up 3.29 percent
Mumbai: Homegrown auto major Mahindra & Mahindra (M&M) on Friday reported 19.79 percent decline in its standalone profit after tax (PAT) to Rs 765.96 crore for the first quarter of the current fiscal as sales were hit by GST transition.
The company had posted a net profit of Rs 954.95 crore during April-June period of last financial year.
Revenue from operations during the first quarter of 2017-18 stood at Rs 12,335.56 crore, up 3.29 percent from Rs 11,942.9 crore the year-ago period, M&M said in a regulatory filing.
The company's vehicle sales were at 1,12,293 units during the first quarter. It sold 81,270 tractor units during the period under review.
Elaborating on the quarterly performance, M&M said the automotive industry was impacted due to impending transition to Goods and Service Tax in the first quarter of 2017-18.
Passenger vehicles sales were adversely impacted in anticipation of a price reduction in the new tax regime and reported a nominal growth of 4.4 percent, it said.
M&M further said heavy commercial vehicles (goods) segment also showed a decline as a result of pre-buying of BS-III vehicles in Q4 of the previous fiscal.
Moreover, saturation of replacement demand coupled with production constraints of BS-IV models led to sales being the lowest in the previous 13 quarters, it added.
On the tractors front, the company said based on a normal monsoon outlook, industry sales continued to post growth in April and May 2017.
"However, June 2017 witnessed a decline of 1.7 percent owing to the uncertainty with regard to transition to GST. Overall, the domestic tractor industry witnessed a growth of 8.5 percent in Q1. The company however outperformed the industry and grew 13.2 percent," it said.
M&M said it made a provision of Rs 144 crore to support dealers in respect to duty paid for goods lying with them following transition to GST to overcome unavailability of input credit for certain taxes paid, as well as due to tractors being exempt from excise duty in the earlier regime.
Shares of the company were trading at Rs 1,401.15 apiece, down 1.11 percent, on BSE.
On Twitter, Mahindra confirmed the current-gen XUV500 will be discontinued once the Mahindra XUV700 is launched.
The Mahindra XUV700 is expected to come with 2.0-litre petrol and 2.2-litre diesel engines; will also get AWD.