BackRise in sales, margin boost M&M profits
Rise in sales, margin boost M&M profits
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Auto maker Mahindra and Mahindra Ltd (M&M) surpassed expectations for the September quarter. Revenue from operations grew by around 36% over the year-ago period. This has come on the back of rising sales volumes, rationalization of prices and higher market share. According to the firm, the earlier onset of the festival season and easy access to rural credit were factors that drove sales.
An analyst pointed out that the excellent results may lead to a 10% upward revision in earnings estimates for 2009-10. It’s possible, though, that the second quarter could be the best for the fiscal. Input prices may harden by around 4% on a year-on-year basis in October-March.
On Thursday, the share shot up 4% to Rs825 in a weak market. The firm has already posted earnings per share of Rs40 for the first six months of the fiscal. On an annualized basis, the earnings are discounted around 10 times at the current price. Given M&M’s market share, the stock could see a rerating.
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