Mahindra & Mahindra (M&M) Q4 02/03 earnings summary

Executive summary

• FY03 total income rose to Rs 4,596.79 crore from Rs 3,996.75 crore; profit after tax increased to Rs 145.53 crore from Rs 102.69 crore.

• Automotive results benefited from Scorpio and stronger vehicle demand; tractor volumes weakened with poor monsoon and farm incomes, while market leadership and share gains continued.

• Consolidated turnover grew 13% to Rs 6,194.98 crore; consolidated profit before minority interests reached Rs 216.18 crore, up 75% YoY.

Financial highlights

• Standalone net sales/operating income rose 14.03% to Rs 3,732.13 crore; gross sales and income from operations were Rs 4,517.14 crore, up 14.37%.

• Standalone profit before tax was Rs 197.03 crore vs Rs 81.09 crore; PAT was Rs 145.53 crore vs Rs 102.69 crore.

• Exceptional item was a Rs 57.66 crore gain, mainly from divesting the 51% holding in Mahindra Sintered Products; prior year had a Rs 17.29 crore loss.

• Consolidated sales and other income increased to Rs 6,194.98 crore from Rs 5,472.68 crore; profit attributable after minority interests was Rs 141.71 crore vs Rs 66.24 crore.

• Standalone operating cash flow was Rs 543.78 crore vs Rs 91.44 crore; investing activities used Rs 144.04 crore and financing activities used Rs 438.39 crore.

Outlook and guidance

• FY04 outlook was supported by expected favourable monsoon and economic conditions; early-year vehicle production and dispatches rose, while tractor production and dispatches trailed prior-year levels.

• Farm Equipment planned new FY04 models, cost leadership, customer focus and export expansion, with US-market learnings intended for European markets.

• Automotive strategy emphasized new product launches, consolidating Scorpio, Champion and Loadking, and continued cost, value-engineering and supply-chain measures.

• Risks to projections included raw-material availability and prices, cyclical demand and pricing, regulatory and tax changes, and economic developments in India and export markets.