Board of Directors of Mahindra & Mahindra Limited (M&M) has declared the financial status of the company for Q4 of the previous fiscal year. It has also come out with the audited results of the company and Mahindra Group for the whole fiscal. Based at Chakan near Pune, Mahindra Vehicle Manufacturers Limited (MVML) was established as a completely owned subdivision of the company in order to procure quality components for its ever-growing product portfolio. Therefore, it is an important element for the company’s business and only the consolidated results of both M&M and MVML will give a clear picture of the company’s financial performance.
M&M and MVML’s combined gross revenues and other incomes in the last quarter of FY 2011-12 were Rs. 10,333.6 crores. This represents a growth of 37 per cent as compared to the figures of corresponding period last year, which stood at Rs. 7,542.5 crores. In the abovementioned quarter, the Net Profit before tax was Rs. 976.2 crores as against the fourth quarter of last fiscal year, when the figure was Rs. 858.3 crores. Income recorded after tax for the same is reported at Rs. 911.3 crores, which marks a growth of 35.5 per cent in comparison with the figures of Q4 of the previous financial year (Rs. 672.4 crores).
Considering M&M only, the company’s gross revenues and other incomes between January and April 2012 were Rs. 10,288.4 crores. This marks an increase of 38.9 per cent when compared to Rs. 7,407.1 crores that was recorded in the corresponding period last year. During Q4 of the 2012 fiscal, the Net Profit after tax was recorded at Rs. 874.5 crores, thus showing a growth of 44.2 per cent over Rs. 606.5 crores that was recorded in the same time previous year.
At the end of the 2012 fiscal, the gross revenues and other incomes of M&M and MVML stood at Rs. 35,005.2 crores, marking a growth of 33.6 per cent over Rs. 26,201.1 crores of the preceding year. For financial year 2011-12, the Net Profit before tax stood at Rs. 3,785.8 crores, over Rs. 3,544.5 crores that was reported last year. The income recorded after paying taxes for the same period was Rs. 2,997 crores, which represents a growth of 11.5 per cent when evaluated against Rs. 2,687 crores registered in the previous year. For the 2011-12 fiscal year, the operating margin of the two stands at 13.3 per cent.
This increase in profits, in spite of the substantial hike in cost of material, is mainly driven by excellent sales of vehicles and tractors as well as a strict eye on the expenses made by the entity. The Scheme of Arrangement pertaining to the merger of Mahindra’s subdivision, Mahindra Automotive Distributors Ltd. (MADPL) into M&M was accepted by the Bombay High Court, effective from April 01, 2011, in its order (dated 30th March 2012). Owing to this, the financials of MADPL’s Verito converged into M&M's in fiscal year 2012. In lieu of this merger, M&M saved taxes for the current fiscal since the earlier unabsorbed tax losses incurred by the auto business of MADPL became a part of the company.
The standalone gross revenues and other income of M&M for fiscal 2012 stood at Rs. 34,820.3 crores, registering a growth of 34 per cent when compared with figure of last year, Rs. 25,989.2 crores. For this period, Net Profit after tax is Rs. 2,878.9 crores, marking a growth of 8.1 per cent as compared to the figures of last year, which stood at Rs. 2,662.1 crores.
As far as Passenger Utility Vehicle segment is concerned, the company registered sales of 2,02,217 units in fiscal 2012, which marks a growth of 19.5 per cent. With this, the car maker maintained its leading position and grabbed a market share of 55.1 per cent. Considering the passenger car segment, the sales of Verito were registered at 17,839 units, which showed a growth of 78.2 per cent when compared with the figures of last year. Owing to this, the company acquired a share of 9.5 per cent in the market. In terms of exports, M&M shipped 29,176 units of the vehicle in fiscal year 2012, which indicates a growth of 70.2 per cent over the 17,138 units of fiscal 2011. The products of M&M were mainly demanded in the auto markets of SAARC, South America and South Africa.
For the third year in a row, in the terms of sales, M&M remained the largest tractor company across the globe on the back of sales of 2,36,666 units. With these figures, the company marked a growth of 10.4 per cent in comparison with last year’s figures, which stood at 2,14,325 units. These figures were inclusive of the local sales recorded by the company, which stood at 2,22,944 units, whereas last year’s domestic sales were 2,02,513 units. With a share of 41.4 per cent in the local tractor market, M&M has been the leader of the segment for 29 years in a row. Considering the exports during this period, the figure went up by 16.2 per cent and amounted to 13,722 units, while last year’s volumes stood at 11,812 units.
Mahindra's Board of Directors has proposed dividend of Rs. 12.50, which is equivalent to 250 per cent of the face value of the share, i.e., Rs. 5. Last year’s dividend was Rs. 11.5, which was 230 per cent, wherein 210 per cent was normal and 20 per cent was special. This decision of the company will result in absorption of Rs. 868.61 crores, while the same was Rs. 802.64 crores last year (figures are including of tax). The dividend will be paid to shareholders whose names are recorded in the company's books till the date the book is closed.
In fiscal 2012, the cumulative gross revenues and other incomes of the Group surged by 58.9 per cent and amounted to Rs. 63,357.8 crores (USD 13.3 billion); last year’s figures stood at Rs. 39,864.4 crores (USD 8.3 billion). During the period, the consolidated profit after subtracting minority interests and exceptional items stood at Rs. 3,126.7 crores (USD 654.5 million). This showed a growth of 1.5 per cent when compared with last year’s figures of Rs. 3,079.7 crores (USD 644.7 million). The stupendous increase in revenues of the company was mainly driven by the addition of the revenues of Ssangyong Motor Company Limited. However, a slow growth in the profits of the company was also recorded because of the incorporation of Ssangyong’s financials. Without considering Ssangyong, the growth in cumulative gross revenues of the company stood at 28.1 per cent and profits at 14.5 per cent.
In the previous fiscal, some divisions of M&M, including Mahindra Finance, Mahindra Lifespace Developers and Mahindra Forgings, bolstered their performance manifolds as compared to the preceding year. The consolidated revenues of Mahindra Finance registered a growth of 43 per cent, whereas its profits surged by 30 per cent. Likewise, cumulative revenues of Mahindra Forgings grew by 27 per cent, while its profits marked an increase of 10 per cent.
On a whole, at the end of the year, M&M consisted of 114 subdivisions, 6 joint ventures and 11 associate companies. The total gross revenues and other income of the group for the complete year stood at Rs. 73,556.8 crores (USD 15.4 billion).
Making a comeback after the international financial crisis, the economic structure of India became less effective in fiscal 2012. Struck by a substantial hike in energy prices, depleted government finances, economic deceleration in developed economies, sharp depreciation in value of INR, soaring inflation and increasing interest rates, the growth rate of India shrunk to 6.9 percent. During the last two financial years, the economy of the country had successfully clocked growth of 8.4 per cent.
Though agricultural and services sectors were strong, the disturbed global economic scenario and the fragile local economy adversely affected industrial activities as well as its growth rate. Owing to the increasing threats to international economy and constantly worsening local macro environment, the short term prospects of the economy will seem to be fairly taxing. Nevertheless, the Group is concentrating on the development of new products, cost control strategies and process innovation, which are expected to help it cope up with this economic challenge. The company aims to pace up its growth in the latter half of fiscal 2013; its medium and long term expectations for the Indian economy are also positive.
