M&M Races Past Estimates With 27% Profit Growth
M&M’s reported strong second quarter earnings on sales volume boost.
Mahindra & Mahindra Ltd. delivered a 27.1 percent jump in net profit in the July to September quarter, beating street estimates.
Net profit increased to Rs 1,163 crore from Rs 915 crore in the same quarter last year, according to the company’s filing on the stock exchanges. The profit beat the Rs 1,024 crore consensus of analysts tracked by Bloomberg.
Total income rose 15.6 percent to Rs 11,364 crore, boosted by higher sales volumes during the quarter. Sales of M&M’s automobiles rose 11.5 percent to 1.3 lakh vehicles, while sales of tractors jumped 36.3 percent to 61,658 units.
Other income stood at Rs 707.5 crore as on September 30, 2016.
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Earnings before interest, tax, depreciation and amortisation rose 22.4 percent to Rs 1,234 crore, and margins expanded to 10.9 percent from 10.3 percent in the same quarter last year.
Consumption-Driven Growth
The Seventh Pay Commission’s payout to government employees, and lower interest rates will "bode well for broad-based consumption-led growth in the coming quarters,” according to the company’s press statement.
There is discernible traction on reforms including GST which augurs well for India’s growth trajectory. Moreover, there are signs of demand recovery manifesting through broader consumption pick up in growth rates in automobile sales, air passenger traffic and retail loans.M&M’s Press Statement