Mahindra & Mahindra, manufacturer of farm tractors and the Scorpio utility vehicle, has reported a 47.12% increase in net profit to INR5.12 billion, up from INR3.48 billion last year.
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Operating income from operations improved 34% from last year to INR6.66 billion. Significantly, the company also reported an improvement in operating margin from 10.84% last year to 11.57% this year.
The year 2006 is important for Mahindra & Mahindra. Not only is the company embarking on its joint project with Renault that will launch the Logan in 2007, but it will also focus seriously on the component sector.
The group will acquire Amforge’s unit at Chakan, in West India, and merge it into into Mahindra Automotive Steels (MASPL), consolidating the business. The Chakan unit has a forging capacity of 36,000 tonnes, with FY-05 revenues of INR 2.10 billion. It supplies Tata Motors, Ashok Leyland and Maruti, apart from Mahindra & Mahindra.
MASPL, a wholly-owned subsidiary of M&M, is setting up a machining unit, which combined with the merged forgings business, would make it a big integrated forgings company. The forgings business of the group is estimated to reach a turnover of INR 3.0-3.5 billion in the next two years. Meanwhile, Mahindra Special Auto Technologies (MSAT), the component initiative of the group is expected to reach turnover of around INR9.0 billion.
Deepesh Rathore / Tilak Swarup
