Mahindra & Mahindra (M&M) Q4 04/05 earnings summary

Executive summary

• Consolidated FY05 turnover rose 32.8% to Rs 10,635.29 crore and profit after tax increased 60.5% to Rs 724.08 crore; standalone PAT was Rs 512.67 crore.

• Record vehicle and tractor volumes, overseas expansion and new product launches supported growth; cost controls and value engineering helped offset higher input costs.

Financial highlights

• Standalone gross income was Rs 7,804.09 crore versus Rs 6,001.23 crore; net income was Rs 6,769.05 crore versus Rs 5,057.45 crore.

• Standalone profit before tax was Rs 714.17 crore versus Rs 438.19 crore; PAT was Rs 512.67 crore versus Rs 348.54 crore.

• Standalone basic EPS was Rs 44.19 versus Rs 30.04; diluted EPS was Rs 41.96 versus Rs 30.04.

• Consolidated segment results after exceptional items: Automotive Rs 473.37 crore, Farm Equipment Rs 191.39 crore, Financial Services Rs 131.59 crore and IT Services Rs 77.34 crore.

Outlook and guidance

• Short- to medium-term demand was expected to remain strong, though high prior-year growth could moderate FY06 automotive growth; tractor-industry growth was expected to moderate after FY05 expansion.

• A near-normal FY06 monsoon forecast and rural-policy support were expected to aid automotive and Farm Equipment demand; rising steel and other input costs remained a challenge.

• FY06 priorities included cost leadership, value engineering, efficiency, supplier and dealer connectivity, product development and overseas market expansion.