Jeeto Minivan. Photo: Twitter
Mahindra & Mahindra (M&M) said its consolidated net profit declined 11.75 per cent in the April-June quarter to Rs 768 crore from Rs 870 crore in the same period last year. The company claimed to have taken a hit of Rs 94 crore on profit after tax for transitioning to the goods and services tax (GST) regime.
Excluding the GST transition cost, profit of M&M (along with subsidiary Mahindra Vehicle Manufacturers Limited) stood at Rs 862 crore. Total cost of GST transition at profit before tax level stood at Rs 144 crore.
Revenue rose about five per cent to Rs 11,094 crore in the quarter.
“The auto industry saw an impact of the GST transition with the passenger vehicles sales being adversely impacted in anticipation of a price reduction and reporting a nominal growth of 4.4 percent,” said Pawan Goenka, managing director, M&M. The new tax also affected company’s earnings before interest, taxes, depreciation and amortisation (Ebitda), which slipped 2.87 per cent to Rs 1,454 crore in Q1. The Ebitda margins stood at 12.7 per cent.
M&M’s sale of utility vehicles slipped 5.1 per cent in Q1 when the company sold 53,082 units compared to 53,082 units in the same period last year. The company’s total sales (including commercial vehicles and tractors) grew by 1.2 per cent at 112,293 units in the June quarter, compared to 110,959 in the corresponding quarter last year.
The company said its passenger vehicles sales were adversely impacted in anticipation of a price reduction in the new tax regime and reported a nominal growth of 4.4 per cent. It said the heavy commercial vehicles (goods) segment also showed a decline as a result of pre-buying of BS-III vehicles in Q4 of the previous fiscal. Moreover, saturation of replacement demand coupled with production constraints of BS-IV models led to sales being the lowest in the previous 13 quarters, the company said.
The stock price closed at Rs 1,418.30 at the BSE, up marginally over previous day.