Car and utility vehicles manufacturer Mahindra and Mahindra posted a better than expected performance for the September quarter, with profit rising over 22 percent.
The company posted a profit of Rs 1,411 crore against RS 1,156.7 crore it posted during the same quarter last year. A poll of analysts by CNBC-TV18 had seen this figure to be around Rs 1,228 crore.
Revenues were higher by 19.4 percent at RS 12,018 crore against Rs 10,065 crore year on year.
At an operational level, the earnings before interest, taxes, depreciation and amortisation (EBITDA) soared 35.1 percent at RS 1,923.4 crore against Rs 1,423.6 crore last year, while the operating margin came in at 16 percent, higher than last year’s 14.1 percent.
The company’s Board also approved a bonus issue in the ratio of 1:1.
Experts highlighted that the company was able to curtail its other expenses and employee costs that helped in the operational beat.
“Contribution of tractors has been better. We were expecting a margin surge and this has come on the back of other expenses and employee costs going down. The trend has been visible in most auto results,” Ashwin Patil of LKP Securities told CNBC-TV18.
Meanwhile, Prakash Diwan of Altamount Capital Management also highlighted a point of caution. “Other expenses look better as there was no advertising and promotion (A&P) cost this quarter. Big headwinds could be the anti-pollution drive. They still have many diesel vehicles in product portfolio and that is worrying,” he told the channel as well.
At 14:42 hrs Mahindra and Mahindra was quoting at Rs 1,388.80, up Rs 27.30, or 2.01 percent, on the BSE.
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