Mahindra & Mahindra (M&M) Q4 98/99 earnings summary

Executive summary

• FY99 income reached Rs. 422,499 lakh, while profit after tax was Rs. 22,858 lakh, down from Rs. 25,147 lakh; market share gains and cost control partly offset a weak vehicle market.

• Utility vehicles retained market leadership at 57.52% share, and tractors remained the leading domestic brand for the 16th consecutive year at 27.2% share.

• Strategy emphasized new products, productivity, customer partnerships, exports, and concentration on vehicles and tractors; a 55% dividend was recommended.

Financial highlights

• Income was Rs. 422,499 lakh versus Rs. 412,795 lakh in FY98; PBT was Rs. 28,008 lakh versus Rs. 32,947 lakh.

• PAT was Rs. 22,858 lakh versus Rs. 25,147 lakh; after Rs. 267 lakh of prior-year items, FY99 profit balance was Rs. 22,591 lakh.

• Interest expense rose to Rs. 15,186 lakh from Rs. 12,288 lakh; depreciation increased to Rs. 11,198 lakh from Rs. 9,929 lakh.

• Proposed dividend was 55%, or Rs. 5.50 per ordinary share, absorbing Rs. 63.11 crore including dividend tax.

Outlook and guidance

• Record-crop expectations were seen as a potential demand catalyst; a broad array of vehicles and tractors and further product development were planned.

• April–May FY2000 vehicle production was 11,903 versus 9,949 a year earlier, and dispatches were 11,895 versus 9,477.

• April–May FY2000 tractor production was 11,203 versus 7,195, and dispatches were 11,727 versus 7,330.

• Project Scorpio development was progressing; CNG Voyager and Hard Top variants had passed testing and were expected to launch soon.