M&M standalone net profit grows 12.36% at Rs 955.21 cr on improved vehicle sales

Mumbai: Mahindra & Mahindra Wednesday reported 12.36 percent increase in standalone net profit at Rs 955.21 crore for the first quarter ended June 30, 2016-17. It had posted standalone net profit of Rs 850.09 crore in the same quarter of last fiscal, M&M said in a BSE filing.  Total revenue during the quarter under review stood at Rs 11,942.9 crore as against Rs 10,470.86 crore in the year-ago period, up 14 percent. The company said it sold 1,10,959 vehicles during the April-June period of the current fiscal, up 9.7 percent from the year-ago period. Utility vehicles sales were up 13 percent at 55,909 units. Tractor sales during the first quarter stood at 71,785 units, up 21 percent from the corresponding period last fiscal, the company said. The company said despite rising global uncertainties, India’s economic recovery is slowly but surely gaining momentum. While public investment expenditure remains strong, urban demand has been picking up pace since the third quarter of the previous fiscal and is expected to receive further impetus from the 7th Pay Commission, which will be given effect in the current month. “More importantly, the double digit growth in domestic sales of tractors and two-wheelers witnessed in the first quarter of 2016-17 suggests that a recovery in rural demand is underway,” M&M said. Given the robust rainfall received thus far and IMD’s prediction of normal rains for the rest of the monsoon season, rural demand can be expected to gather further strength in the coming months providing a much needed boost to industrial activity in the country, it added. On the challenges, M&M said: “Weak external demand, underutilised capacities and balance sheet stress, however, continue to weigh heavily on domestic private investment. “Even as we recognise the downside risks currently emanating from major advanced economies, our outlook on domestic growth remains positive and we look to the future with confidence.” Shares of M&M were trading at Rs 1,445.50 apiece in the afternoon trade, down 2.37 percent from the previous close on BSE.