M&M Q4 net profit rises 50% to Rs 1,155 crore, beats Street estimates

Domestic vehicle manufacturer Mahindra and Mahindra on Tuesday reported a 50 percent year-on-year rise in its net profit for the March quarter to Rs 1,155 crore.

Analysts polled by Reuters had expected the Mahindra Group's flagship company to report a standalone net profit of Rs 1,037 crore for the quarter under review.

The company's revenue for the reporting quarter rose 26 percent on year to Rs 13,189 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose over 70 percent over the same period to Rs 1,995 crore.

Despite a marked rise in cost of raw material, which came in 21.6 percent higher than in the same quarter last year at around Rs 8,725 crore, muted increases in other heads like employee benefits expenses and other expenses, limited the rise in total expenses to 19 percent.

As a result, M&M's EBITDA margin, or operating profit margin, expanded by as much as 400 basis points on year to 15.1 percent.

"Economic activity is expected to gather pace as the transitory effects of implementation of the goods and services tax (GST) recede. This outlook will also be lifted by tailwinds from normal rainfall with the weather bureau forecasting a 'normal' monsoon for the third successive year in its first stage long range forecast," Mahindra & Mahindra said in a post-results statement.

In terms of the different segments M&M operates in, the automotive segment, which brings in the lion's share of the company's revenue, witnessed robust growth. Revenue from the segment grew 19.6 percent on year to Rs 9,104.85 crore and the profit from it rose 78 percent to Rs 971.33 crore.