By Nandan Mandayam
BENGALURU (Reuters) -Mahindra and Mahindra on Friday posted an estimate-beating 98% jump in first-quarter profit, boosted by strong sales of its pricier sport-utility vehicles (SUVs).
The results for Mahindra – India’s second-largest SUV maker by volume – were in line with rivals Maruti Suzuki and Tata Motors, which also posted higher-than-expected profits on the back of strong SUV sales.
Mahindra’s “good set of numbers,” will continue to be backed by higher operating leverage and cooling commodity prices, which in turn would prop margins up further, said Himanshu Singh, analyst at Prabhudas Lillader.
The first quarter profit margin before exceptional items rose to 10.4% from 7.7% a year before.
Mahindra also said its plans to launch a new range of electric SUVs were on track. The company currently has one mainstream electric offering in its four-wheeler stable – the XUV400 – for which deliveries began in March.
Chief Executive Officer Anish Shah said the company was not “looking for additional funding in the EV space,” a day after roping in Singapore’s Temasek as an investor for its EV unit – Mahindra Electric Automobile.
“We have a very strong business and we have the cash flow to fund it. Very likely, the auto cash flow itself will fund everything that it needs,” Shah said on the EV arm, which also counts British International Investment as an investor.
Mahindra has so far infused 16 billion rupees ($193.23 million)in its EV arm out of a planned investment of 100 billion rupees by fiscal 2027, Group CFO Manoj Bhat said.
Shares of the company closed 0.3% lower after the results.
($1 = 82.8010 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru; additional reporting by Meenakshi Maidas, editing by Eileen Soreng, Varun H K and Nivedita Bhattacharjee)
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