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Mahindra & Mahindra maintains margins

— PHOTO: VIVEK BENDRE

CHALLENGES AHEAD: Anand Mahindra (right), Vice-Chairman and Managing Director, with Bharat Doshi, Group Finance Officer, Mahindra & Mahindra, at a press conference in Mumbai on Wednesday.

MUMBAI: Mahindra & Mahindra (M&M) has reported a marginal drop in its net profit at Rs. 221.20 crore for the fourth quarter of 2007-08 against Rs. 236 crore in the same period of the previous year. In an extremely challenging environment of rising costs and hardening interest rates, M&M reported a 15 per cent growth in revenues at Rs. 3,654.50 crore (Rs. 3,176.50 crore).

For the full year, the company reported a 3.3 per cent growth in net profit (after considering exceptional items, prior-period adjustments and tax) at Rs. 1,103.40 crore. Significantly, the company was able to maintain a double digit operating margin at 11.6 per cent despite a challenging economic environment in which tractor demand decelerated, sharp increase in input costs brought margins under pressure and an appreciating rupee eroded export profitability. Gross revenues for the year were up 14.5 per cent at Rs. 13,238 crore (Rs. 11,558 crore). The board of directors has recommended a dividend of 115 per cent (previous year 100 per cent plus a 15 per cent special dividend).

During the year, the domestic tractor industry sales were 3.02 lakh units (3.18 lakh units), a decline of 5.1 per cent largely due to higher interest rates and stringent lending norms.

The company sold 90,509 tractors (95,006 units), a decline of 4.7 per cent but with a market share of 30 per cent. Exports registered a 13.4 per cent growth with 8,533 tractors (7,525 tractors) exported.

PTI reports:

The company planned to invest Rs. 2,000-crore into its automotive business. The investment would be done in the current fiscal, Group’s Chief Financial Oficer Bharat Doshi, said here.

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