MAHINDRA & MAHINDRA
UPDATE DT 12.09.2011
M&M had reported excellent results for the first quarter ending June 2011 as below :
Standalone results
Gross Revenues and Other Income for q/e 30th June 2010 is Rs.5663.5 crores as against Rs.4711.8 crores during the corresponding period last year – a growth of 20.2%.
Profit after tax for the current quarter is Rs. 562.4 crores as against Rs. 400.9 crores Q1 last year – a growth of 40.3%.
The Operating Margin for the quarter is 15.03% as compared to 14.35% in Q1 F2010. The good financial results of the company for the quarter is due to higher volumes, focused cost control, prudent financial management resulting in lower interest expenses and a fuller realisation of the synergies arising from its acquisition of the erstwhile Punjab Tractor’s Ltd.
Its dominant position in utility vehicles segment continues with a market share of 59.4%. The company sold 53,948 utility vehicles in the quarter as against 48,720 utility vehicles in Q1 F2010, thus recording a volume growth of 11%.
All products of the company, viz. Bolero, Scorpio, Xylo and the Pick Ups performed well during the quarter. The company exported 3125 vehicles during the quarter as against 1145 nos. in Q1 last year – an impressive growth of 173%.
The company’s products performed very well in SAARC, South Africa and South American markets.
In Q1 F2011 the company sold 47,916 tractors under the Mahindra & Swaraj brands as compared to 42130 nos. in Q1 last year – a growth of 13.7%. The company’s domestic market share for the quarter stood at a commendable 40.7%.
The company’s tractor exports at 2376 nos. in the quarter registered a strong growth of 71.4% over the 1386 nos. exported in Q1 last year.
Consolidated Results
The Gross Revenues and Other Income for Q/E 30th June 2010 grew by 9.4 % to Rs. 8,576.2 crores (USD 1.8 billion) from Rs.7,841.4 crores (USD 1.7 billion) in last year. The consolidated group profit for the year after exceptional items, prior-period adjustments and tax and after deducting minority interests is Rs.620.8 crores (USD 132.9 million) as compared to Rs.431.9 crores (USD 92.5 million) earned in the previous year - a growth of 43.7%.
In March 2010, with AT&T exercising its stock options, Tech Mahindra Ltd (TML) and its subsidiaries ceased to be group subsidiaries and became Joint Ventures of the Company. As a result of this change, the financials of TML Group from Q1 F2011 instead of being consolidated 100% are, as required by Accounting Standard AS 27, consolidated only in proportion to the Company’s shareholding in TML.
Hence the Group Revenues are not comparable with that of the previous years. On a comparable basis the Gross revenues and Other Income of the Group for the current quarter is Rs 9218.7 crores (US$ 2.0 billion) – a growth of 17.6% over Q1 last year.
The Group numbers reported above do not include that of Satyam Computers Services Ltd. whose accounts are under restatement.
As on 30th June 2010, the Group comprised of 103 Subsidiaries, 5 Joint Ventures and 11 Associates. During the current quarter, some of the major group companies like Mahindra Finance, Mahindra Lifespaces and Mahindra Ugine Steel significantly improved their performance over the previous year. The performance of Mahindra Finance with a 23% growth in consolidated revenues and an 86% increase in profits, and that of Mahindra Lifespaces with a 41% growth in revenues and a 39% profit growth, deserve special mention. Mahindra Ugine Steel which had reported a loss of Rs.4.6 crores for Q1 of F-10 has registered a turnaround and reported a profit of Rs.2.8 crores for the current quarter.
ANNOUNCEMENT BY M&M TO NSE
23-08-2010 Mahindra & Mahindra Limited has informed the Exchange regarding a press release dated August 23, 2010 , titled "Mahindra & Mahindra signs MoU with Ssangyong Motor Company Strategic acquisition to make Mahindra & SYMC a combined force in the global SUV space".
OTHER RECENT NEWS ON M&M
September 1, 2010: M&M’s Farm Equipment Sector (FES), a part of the U.S. $7.1 billion Mahindra Group, maintained its leadership position in the tractor industry in August 2010.
Total tractor sales (domestic + exports) in August 2010 stood at 13435 units, as against 10646 units for the same period last year, an increase of 26%.
For the period April to August 2010, total cumulative sales (domestic + exports) stood at 78175 units, as compared to 66881 units for the corresponding period last year, an increase of 17%.
Exports during the month of August 2010 were 982 units, as against 485 units for the same period last year, an increase of 102%. Domestic sales in August 2010 stood at 12453 units, as against 10161 units for the same period last year, an increase of 23%. {M&M Press Release}
September 1, 2010: M&M’s auto sales for August 2010 stood at 28903 units as against 22413 units during August 2009, an increase of 29%.
The company’s domestic sales stand at 27275 units during August 2010, as against 21410 units during August 2009, an increase of 27%. Exports have grown by 62% during the same period.
The domestic sales for the passenger UV range of products including the Bolero, Scorpio and Xylo stood at 12994 units during August 2010 up by 14% from 11443 units during August 2009.
The 3-wheeler range of products domestic sales stood at 5074 units during August 2010 up by 39% from 3652 units during August 2009. The 4-wheel pickups range of products domestic sales stood at 7533 units during August 2010 up by 45% from 5188 units during August 2009.
The sale of the company’s sedan, the Logan, has also seen an upward trend with sales for August 2010 standing at 801 units as against 469 units during July 2009, a growth of 71%. {M&M Press Release}
September 1, 2010: Mahindra Two Wheelers, a part of the US $7.1 billion Mahindra Group, has further consolidated its presence in the two wheeler segment, with record sales of 15,165 units in August 2010.
Mahindra Two Wheelers today announced that its sales for the month of August 2010 stood at 15165 units, as against 4005 units in August 2009, an increase of 279%.
Total cumulative sales from April to August 2010 stood at 54261 units, as compared to 12948 units for the same period last year, an increase of 319%.
“We are very happy with the response to our Power Scooters. Consumers have laid their trust in brand Mahindra which has helped us grow more than 75% in the last four months. We have been achieving several milestones. Just a couple of months ago, we crossed a landmark figure of 1,00,000. Our efforts to come closer to consumers are also bearing fruit as we now have more than 370 dealer ships across the length and breadth of the country.” said Mr. Anoop Mathur, Sector President and Member of Group Executive Board, M&M.
Mahindra 2 Wheelers’ Power Scooters cater to a range of consumer segments. The Mahindra Rodeo with its very innovative, contemporary features is popular amongst the Indian youth, while the Mahindra Duro is positioned as a family scooter. The Flyte is the Indian woman’s two-wheeler of choice. {M&M Press Release}
Sept.11 : M&M is working on smaller fuel-efficient petrol engines to power its future growth in overseas markets and reduce its current dependence on diesel-enabled engines and offer new engine options.
With the help of AVL of Austria, a consulting and powertrain systems development company, it is developing petrol engines with capacity of less than 2 litre for the petrol range.
Smaller fuel-efficient petrol engines are much sought after in markets like the US, Europe, west Asia and Africa. Tighter global emission norms and high fuel costs have compelled many automotive companies to go for smaller engines and smaller vehicles.
M&M is developing new models, including a mini Xylo, which could require petrol engines for particular markets. It has also developed a diesel-driven, pick-up version of the Scorpio for the US market, but may explore a petrol engine for it, too.
In line with global average, it spends 2.5-3 per cent of its turnover on R&D every year. Mahindra had earlier converted a 2.2-litre diesel engine into a petrol one for its Scorpio. The model, a turbo-charged variant, however, caters only to the export market and is not sold in India.
Sept.02 : M&M wants to launch a passenger vehicle variant under the Maxximo platform over the next 12 months and has already invested close to Rs 300 crore on this at the Chakan plant. M&M is trying to ramp up their production facility by end of next month from about 2,000 vehicles per month to 3,000 units.
SEP, 01 : M&M has signed the MOU for acquisition of Korean car and sports utility vehicle maker SsangYong making it the latest of its several acquisitions in the last decade.
M&M’S RECENT ACQUISITIONS
Jiangling Tractors, China 2004 tractors
Stokes Group, UK 2006 forging
Punjab Tractors, India 2007 tractors
Jeco Holding, Germany 2007 forging
Schoneweiss, Germany 2007 forging
Yueda Yancheng Tractor, China 2008 tractors
Europe Engines Engineering, Italy :2008 two-wheeler design
Kinetic Engineering, India 2008 two-wheelers
Satyam, India 2009 software
Reva Car Company, India 2010 electric cars
M&M’s success in M&A is to be seen in integrating all merged companies into its culture smoothly.
Aug .30 : (PTI) : M&M has decided to separate the agri business of its subsidiary Mahindra Shubhlabh Services and merge it into itself. MSSL has been into seeds, fertilisers, chemicals and farm finance among others, and exports of fresh fruits. M&M wants special focus on fresh fruits exports.
MSSL provides a one-stop channel to farmers for products, services, knowledge and information. It works on various aspects of agriculture such as seeds, fertilizers, chemicals and farm finance among others.
Aug :26: The government today said it is scouting for a joint venture partner for ailing Scooters India Ltd, which used to manufacture the classic Lambretta model, and is being eyed by Mahindra & Mahindra among others. Generally the policy is such that the majority stake remains with the government.
Aug.20: (PTI) : M&M today said it has received environmental clearance from the US authorities for its diesel pick-up trucks, a step which could bring it closer to launching the vehicle there. M&M said it is the first Indian automobile manufacturer to receive a Light Duty Diesel Federal Tier-2 BIN-5 & OBD II Compliance Certificate, which was granted by the Environmental Protection Agency (EPA) of the USA on August 17, 2010. "With this certification, Mahindra has joined a select group of global automobile manufacturers who have received this certification for a diesel-powered light duty vehicle (LDVs)," the company said in a statement. The company had planned to launch its diesel pick-up in the US by the end of 2009, but has missed two deadlines since, due to regulatory issues. It has now set 2010-end as the possible time for launching the vehicle in the US
COMMENTS
M&M has produced excellent results for Q1 FY 2011. It’s Indian and foreign operations are moving up the ladder well. As of now, it appears that MM can pull off a big success in SsangYong, which is its latest acquisition, as the Auto market all over the world is quite on the up move.
However, it does seem to be in a big hurry to become a world class multinational in Auto Industry. It has also entered almost all segments of auto Industry. With a reasonably good Brand Name and technology, and considering the current boom times, it has good scope to succeed in world markets.
Current and Next q’ly results could be much better than last q’ly results – judging from August sales and current auto sector boom conditions.
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