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M&M net profit rises 146 pc in second quarter

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Higher sales, including exports, help company improve profits

MR A. CHOUDHARI, President-Farm Equipment Sector Member of the Management Board, Mahindra & Mahindra, and Mr Bharat Doshi, Executive Director-Finance & Corporate Affairs, at a press conference in Mumbai. — Shashi Ashiwal

Mumbai , Oct. 26

Mahindra & Mahindra has posted a 146 per cent rise in net profit at Rs 386.48 crore for the second quarter ended September 30, 2006, as against Rs 157.2 crore in the same period last year. The profit includes Rs 140.29 crore exceptional and special items. Excluding this, the net profit for the quarter is Rs 247.17 crore, an increase 56 per cent.

Higher sales, including exports, have mainly helped the company to improve profits.

Gross income increased by 30.6 per cent to Rs 2,890.1 crore (Rs 2,212.1 crore). This growth is largely contributed by exports that posted an increase of 51.5 per cent to 2,761 vehicles (1,822 vehicles).

All-time high

Revealing the figures to reporters, Mr Bharat Doshi, Executive Director, M&M, said this is the highest-ever quarterly vehicle export in terms of volume. Sales in the domestic market for utility vehicles rose by 10 per cent (against the industry growth of 13 per cent) at 29,449 units (26,601 units).

Sales were boosted by the strong demand for hard top vehicles; Scorpio posted an increase of 20 per cent in sales volume. The growth in sales has had a cascading effect on their ranking in the JD Power survey for sales and customer satisfaction too; the company is now ranked 3rd for CSI (customer satisfaction index) and 4th for SSI (sales satisfaction index).

The farm and equipment sector registered a growth of 39.9 per cent selling 21,801 units (17,096 units) in the domestic market while exports surged ahead with an increase of 64.1 per cent selling 1,764 tractors (1,075 units).

LCV segment

The company that is also selling LCVs (light commercial vehicles) in the market has its sales volume increased by 5.7 per cent to 1,991 units against a 4.4 per cent decline in industry sales. Its market share grew to 19.3 per cent in the quarter (17.44 per cent).

The three-wheeler segment has not been an encouraging segment for the company, sales volume declined by 13.8 per cent to 4,273 units as compared to 19.6 per cent decline in industry volumes. However, the market share of the company has moved up to 44.1 per cent (47.2 per cent).

The engine business, part of the growing focus of the company into components and its aggregates has clocked a growth of 78 per cent with sales of 6,934 engine units (including engines used for DG set manufacturing) as against 3,897 units.

On Thursday, M&M shares rose by 5.87 per cent to Rs 730.90 on BSE from Monday's close of Rs 690.40.

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