M&M Q1 profit down 20% as car sales slowed ahead of GST

Excluding the impact of GST that kicked in from July 1, the company earned a profit of Rs 8.60 bn

Company News : Homegrown auto major Mahindra & Mahindra (M&M) today reported 19.79 per cent decline in its standalone profit after tax (PAT) to Rs 765.96 crore for the first quarter of the current financial year as sales were hit by GST transition.

Mahindra & Mahindra Ltd posted an about 20 per cent fall in quarterly profit on Friday, missing estimates, as sales growth in passenger vehicles slowed ahead of the transition to a new nationwide tax.

The company had posted a profit after tax (PAT) of Rs 954.95 crore during April-June period of last financial year.

Excluding the impact of the Goods and Services Tax that kicked in from July 1, the company earned a profit of Rs 8.60 billion.

Analysts on average had expected a profit of 8.93 billion rupees, according to Thomson Reuters data.

Revenue from operations during the first quarter of 2017 -18 stood at Rs 12,335.56 crore, up 3.29 per cent from Rs 11,942.9 crore the year-ago period, M&M said in a regulatory filing.

The company's vehicle sales were at 1,12,293 units during the first quarter. It sold 81,270 tractor units during the period under review.

Elaborating on the quarterly performance, M&M said the automotive industry was impacted due to impending transition to Goods and Service Tax in the first quarter of 2017-18.

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. Read more