Mahindra & Mahindra (M&M) Q4 96/97 earnings summary

Executive summary

• FY ended Mar. 31, 1997: income Rs. 3,607.57 crore vs. Rs. 2,899.56 crore; profit after tax Rs. 209.33 crore vs. Rs. 168.08 crore.

• Improved efficiency in the Automotive and Tractor divisions supported growth; profit before contingencies, extraordinary items and tax rose 19.75% YoY to Rs. 348.50 crore.

Financial highlights

• Operating income was Rs. 3,607.57 crore; profit before tax Rs. 328.33 crore and net income Rs. 209.33 crore.

• EPS was Rs. 20.56; book value per share Rs. 107.75. Proposed dividend Rs. 5 per share, or 50%, subject to shareholder approval.

• Net cash from operating activities was Rs. 276.51 crore; net cash used in investing activities was Rs. 498.09 crore.

• Adjusted for the net extraordinary credit of Rs. 10.39 crore, reported profit before tax was Rs. 328.33 crore; items included the Kanhe unit transfer and non-compete compensation.

Outlook and guidance

• Current-year production through June 9: vehicles 12,288 vs. 11,090 YoY; tractor production 12,970 vs. 8,966.

• Management expected lower interest rates, improved liquidity and 6%–7% economic growth to support sustained rural-market demand.

• New utility vehicle and tractor ranges were planned for the year; a new Thane R&D facility and faster product-development cycles were planned.

• Business Process Re-engineering was expected to be completed in FY98, targeting productivity, cost and quality gains.