FSA May22 - Draft for Review Financial Statement Analysis 1...

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Draft for Review 1 Financial Statement Analysis
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M&M posts 4% rise in PAT at Rs 242 cr Mahindra & Mahindra (M&M) reported a 4% growth in its profit after tax (PAT) for the quarter ended December 31, 2006 at Rs 242 crore. Income from operations during the quarter improved 17% at Rs 2,576 crore. Operating profit was up 8% at Rs 350 crore. However, profit after tax in the October- December 2006 quarter included exceptional items of Rs 46.9 crore on account of sale of the company’s light commercial vehicles business to group company Mahindra International and octroi receipts. Profit after tax in the third quarter was up 35% if the exceptional items in the previous year are excluded. Operating margin stood at 12.02% compared to 12.02% (excluding the octroi refund) in the same period of the previous fiscal. Bharat Doshi, executive director finance and corporate affairs said the company had succeeded in combating input cost increases by “aggressive and stringent cost management”. “Inspite of input cost increases we have been able to contain costs. We are looking at the current year with optimism but how much more we can do to keep costs down is the question. There is a lot of volatility in the global commodity market and it is difficult to predict which way prices will swing,” said Mr Doshi. M&M has already increased prices of its flagship sports utility vehicle Scorpio by Rs 6,000-10,000 and is looking at increasing the price of the Bolero next week. Pawan Goenka, president of the automotive sector at M&M, said, “There is an interest rate hike threat. A further growth in the interest rate could have a negative effect.” M&M’s tractor sales were up 18% at 26,644 units in the third quarter compared to a 15% growth in the overall tractor industry. Utility vehicle sales grew 12.6% at 33,312 units during the quarter as compared with a 15% increase in the overall industry, as the company’s soft-top utility vehicle sales continued to slide. Sales of pick-up vehicles improved 44% while of light commercial vehicles was up 41%. Three-wheeler sales were down 36% at 3163 units. Vehicle exports grew 36.5% at 1954 units despite a slump in exports to Malaysia following some changes in the duty structure there. On a consolidated basis, M&M posted a 102% growth in net profit at Rs 530 crore for the quarter ended December 31, 2006.( TIMES NEWS NETWORK FEBRUARY 01, 2007) As potential shareholder visit the web- Is M&M doing better than its competititors? Is the share price of M&M reflects the fundamentals of company? Did the company pay dividend in the recent past? What is the return a shareholder can expect from this company? 2
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FSA May22 - Draft for Review Financial Statement Analysis 1...

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