Mahindra & Mahindra (M&M) Q4 99/00 earnings summary

Executive summary

• Income reached Rs. 447,600 lakh in FY2000; profit for the year was Rs. 26,348 lakh, up from Rs. 22,858 lakh in FY1999.

• Automotive and farm equipment outperformed their industries; utility vehicle and tractor market shares rose, while new models and capacity initiatives supported growth.

• The year included the acquisition of a majority stake in Gujarat Tractor Corporation, transfers of two divisions to subsidiaries, and full liquidation of foreign currency convertible bond obligations.

Financial highlights

• Income Rs. 447,600 lakh vs Rs. 422,499 lakh; profit before tax Rs. 35,048 lakh vs Rs. 28,008 lakh; profit for the year Rs. 26,348 lakh vs Rs. 22,858 lakh.

• Profit before depreciation, interest, contingencies, extraordinary items and tax was Rs. 62,590 lakh vs Rs. 54,798 lakh; interest expense fell to Rs. 14,145 lakh from Rs. 15,186 lakh.

• EPS was Rs. 23.85 vs Rs. 21.85; the reported 55% interim dividend was recommended as the sole dividend for FY2000.

• Adjusted for extraordinary items, pre-tax profit was Rs. 34,690 lakh; a net Rs. 358 lakh extraordinary gain brought reported pre-tax profit to Rs. 35,048 lakh.

Outlook and guidance

• Utility vehicle and tractor demand was soft early in FY2001 amid drought conditions; management expected the downturn to reverse if the forecast normal monsoon materialized.

• Automotive development work targeted the Bolero, Marshal 2000, Savari, Isuzu-powered MM UV and Loadking; Bharat II compliance was expected ahead of the 1 December 2000 deadline.

• The company planned to continue its internet and e-business transformation, extending online connectivity to dealers, vendors and customers and advancing supply-chain and customer-management initiatives.