Mahindra & Mahindra, India’s largest utility vehicle maker is the second company after Tata Motors to disappoint the Dalal Street. The company’s profits for the fourth quarter failed to reach the estimated mark. The company reported a 6.3 % increase in net profit for quarter ended March 31, 2011. The company has posted its net profit at Rs. 606.54 crore against Rs. 570.3 crore in the same quarter a year ago.
The fourth quarter of fiscal 2010-2011 witnessed an increase in the net sales of the company to Rs. 6,682.20 crore, as against Rs. 5,278.86 crore in the same period last year. Also for the year 2010-2011, the net profits rose to Rs. 2662.10 crore while the margins came down to 14.71 percent this year from 15.89 percent in 2009-2010.
One of the primary reasons why the company could not make the expected profits was due to rise in the cost of raw materials which in turn impacted the sales. The expenditure on raw materials grew to Rs. 4,173.56 crore during the quarter as compared to Rs. 3,120.98 crore last year. Senior company officials stated that though the company was trying its best to bring down the costs, rising prices of raw materials could impact the margins of the company.