BOMBAY -- Mahindra & Mahindra Ltd., India's largest utility vehicle and leader in the world's largest tractor market, said on Wednesday its quarterly profit more than doubled on surging sales and lower costs.
Mahindra's net profit in its first quarter to June 30 surged to 1.04 billion rupees from 425 million a year earlier. Net sales rose 42 percent to 14.23 billion rupees.
Tractor sales in the past quarter jumped 60 percent, outpacing the industry rate of 50 percent, while utility vehicle sales jumped 30 percent, in line with the sector.
Growth in tractor sales volume this year was likely to outpace the expected industry growth rate of 15 to 20 percent, Gautam Nagwekar, executive vice president in charge of the farm equipment division's marketing and sales, told a news conference.
He said the company was likely to achieve its tractor sales target even if the monsoon was poor, as more than half of the country where usage was high had already received rainfall.
Cheap finance and this budget's exemption of sales tax on tractors would further boost sales as farmers sought to put tractors to non-conventional uses, he said.
There have been worries about the monsoon being delayed. The southwest monsoon is crucial to boosting rural income in a country where two-thirds of arable land depends on rainfall for irrigation.
The company would boost productivity of its Scorpio utility vehicle output by a quarter this fiscal year to March after recently concluding a wage settlement with its workers, officials told a news conference. They did not provide a figure for any additional cost as a result of the settlement.
Mahindra expects to sell 3,000 Scorpio utility vehicles a month for the remainder of the fiscal year, said Alan Durante, executive director of the automotive division. M&M made up half the market share in the utility vehicle segment last quarter.
Mahindra's automotive division, which also makes light trucks and three-wheelers, contributed to three-fourths of profit before interest and tax in the past fiscal year to March 31, while tractor sales accounted for the remaining quarter.