Mahindra & Mahindra Ltd, the nation's biggest sports utility vehicle maker, said Friday fiscal first quarter net profit dropped 3.2% on weak sales. Shares rallied as profit and revenues beat consensus estimates.
Net profit of the maker of Scorpio SUV rose to Rs 8.52 billion in the three months ended Jun 30 compared to Rs 8.81 billion in the same period a year ago, the company said in statement to the stock exchanges today.
The automaker's net sales fell marginally by 2.9% to Rs 97.08 billion in the Apr-Jun period compared to Rs 100.06 billion in the corresponding period a year ago.
Total expenses of the Anand Mahindra unit fell nearly 3.7% to Rs 88.10 billion in the first quarter.
Automotive segment revenue of the Anand Mahindra-led group for the fiscal first quarter stood at Rs 62.59 billion compared to Rs 62.76 billion in the previous year while farm equipment sales fell to Rs 35.72 billion from Rs 38.93 billion in the same period.
"While the consumer demand remains weak, the better than expected rain received in the monsoon season thus far, provides room for optimism on this front as well," Mahindra & Mahindra said in the note.
The company's EBITDA margin expanded to 12.7% in Apr-Jun period from 12.4% a year ago compared to analysts' estimate of 11.4%
Shares gained as net profit of the company came better than expected. Consensus estimates expected the auto maker to post a first quarter profit to fall 11.4% to Rs 7.84 bln while revenue was expected fall 2.8% to Rs 99.73 billion in the same period.
Meanwhile, the company's consolidated net profits slipped 7.3% in the fiscal first quarter on weak sales and lower other income.
Group net profit dropped to Rs 8.31 billion in the three months ended Jun 30 compared to Rs 8.96 billion for the same period a year earlier.
The company's consolidated net sales slipped 3.8% to Rs 94.37 billion in the quarter while other income fell 19% to Rs 1.16 billion in the Apr-Jun period.
At 2:45PM, shares of Mahindra & Mahindra jumped 4.46% to Rs 1,255 on the Mumbai stock exchange.
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