Net profit at Mahindra and Mahindra, and Mahindra Vehicle Manufacturers (MVML) rose 7 percent in the December quarter over a year ago period, the company said on Friday. The earnings were boosted by robust growth in tractors even as higher raw material expenses and high discounts in passenger vehicles and lower commercial vehicles sales weighed on its margins.
The maker of XUV 5OO and Arjun tractors reported a net profit of Rs 12,892 crore during the quarter over Rs 11,491 crore a year ago.
“It was a challenging quarter for tractors, passenger vehicles and commercial vehicles as several negatives came together,” said Pawan Goenka, managing director at Mahindra and Mahindra. He attributed it to unfavorable end to the monsoons which led to a muted festive season. A lower off-take at the dealerships during the festive months left them with unsold stocks prompting manufacturers to offer steep discounts.
During the quarter the Mumbai-headquartered firm sold told of 133,508 units including passenger vehicles, commercial vehicles, three wheelers, an increase of 10 percent over the last year. Tractor volumes also advanced by a robust 13 percent to 87036 units over the last year.