Auto major Mahindra & Mahindra has reported fourth quarter and full year 2005-06 crore results, which are more or less in line with market expectations. The company has managed to improve operating margins, despite a rise in input costs, through better-cost management.
For the quarter ended 31 March 2006, net profit increased 110.37 per cent to Rs321.18 per cent from Rs152.67 crore for the previous year quarter. Standalone revenues increased 18 per cent to Rs2,302.61 crore from Rs1,951.31 crore.
During the quarter the company booked exceptional income of Rs166.09 crore, including Rs146.54 crore from a stake sale in M&M Financial Services through the IPO. Adjusted for the exceptional items, net profits for the quarter declined marginally to Rs155.09 crore from Rs156.58 crore for the previous year quarter.
Operating profits for the quarter increased 29.04 per cent to Rs272.07 crore from Rs210.85 crore. Operating margins improved to 11.89 per cent from 11.04 per cent for the previous year quarter.
Input costs during the quarter increased by 23.36 per cent while staff costs rose 19.98 per cent. M&M managed to protect operating margins by reducing other expenses by 5.3 per cent.
Other income for the quarter declined 66.08 per cent to Rs13.78 crore from Rs40.63 crore. Depreciation charges declined 1.7 per cent while interest costs rose to Rs6.09 crore from next to nil during the previous year quarter.
For the full year 2005-06, standalone net profit increased 67.19 per cent to Rs857.11 crore from Rs512.67 crore for the previous year. Standalone revenues for the full year increased 23 per cent to Rs8,326.54 crore from Rs6,769.05 crore.
Adjusted for extra-ordinary income, net profits increased by 63.14 per cent to Rs647.1 crore from Rs396.66 crore. Other income for the full year declined marginally by 4.28 per cent to Rs103.86 crore from Rs108.5 crore.
Operating profits for the year increased 25.52 per cent to Rs967.24 crore from Rs770.6 crore. Operating margins as a percentage of sales improved to 11.76 per cent from 11.57 per cent during the previous year.
Interest costs for the year rose 230 per cent while depreciation charges increased at a modest 8.67 per cent.
Consolidated net profits for the year 2005-06 increased 93.9 per cent to Rs1,404.01 crore from Rs724.08 crore for the previous year. Consolidated revenues increased 32.23 per cent to Rs12,648.41 crore from Rs9,565.52 crore. Consolidated results include the numbers of subsidiaries engaged in IT services, commercial vehicles and financial services.