India Earnings - Mahindra & Mahindra find a small decline of 4.90% in consolidated profit |TRADING IDEAS

India Earnings - Mahindra & Mahindra find a small decline of 4.90% in consolidated profit

By Abhishek on 5:49 PM

Filed Under: 30-10-2008, India Earnings, MnM, Q2 / FY 08-09

Mahindra & Mahindra (M&M): Announced a small decline in its consolidated net profit by 4.90% to Rs 3,733.30 million for the quarter ended Sep. 30, 2008 from Rs 3,925.80 million for the quarter ended Sep. 30, 2007. Gross Revenue and other Income stood at Rs 77,414.20 million for the quarter ended Sep. 30, 2008 where as the same was at Rs 65,025.50 million for the quarter ended Sep. 30, 2007, a rise of 19.05%.The company reported a steep drop in its standalone net profit for the quarter ended September 2008. During the quarter, the profit of the company declined 20.69% to Rs 2,267.75 million from Rs 2,859.47 million in the same quarter, last year. Net sales for the quarter rose 11.97% to Rs 31,379.57 million, while total income for the quarter rose 13.26% to Rs 32,522.66 million, when compared with the prior year period. The company posted earnings of Rs 9.44 a share during the quarter, registering 21.33% decline over previous year period. During the quarter, the operating margin of the company fell by 777.73 basis points to 5.90% compared with the previous year period. Interest cost increased 84.91% to Rs 152.50 million while depreciation cost rose 10.77% to Rs 638.80 million over previous year period.

Mahindra & Mahindra is a well diversified company having its presence in the auto sector, auto components, farm equipment, infrastructure development, telecom and software and trade and financial services. It is a leading name in the general-purpose utility vehicles market in India. The scheme of amalgamation of Mahindra Holdings & Finance (MHFL), a wholly owned subsidiary of the company, with the company was sanctioned by the High Court of Bombay on July 18, 2008. The scheme is effective Aug. 11, 2008 and is operative from the appointed date of Feb. 01, 2008. The accounting of this amalgamation was done as per the scheme approved by the High Court of Bombay. On account of the merger the figures for the quarter and half year of the current year are not comparable with that of the previous year, the company said.