||Mahindra profit rises 29 percent on tractor demand.
||M&M expects strong demand for its tractors to offset falling sales of its sport utility vehicles as it posted a forecast-beating 29 percent rise in first-quarter profit.
Mahindraâ€™s tractor business has benefited from a higher-than-normal monsoon rain. Tractor sales in its domestic market rose 26 percent in the period.
â€œIn terms of the budget that we had madeâ€¦we would certainly go beyond our plans in tractors and certainly be below our plans in automotive,â€ said Pawan Goenka, president, automotive and farm equipment sectors. â€œSo to that extent, yes, there will be some off-setting that will happen.â€
The company expects to benefit from growth in the tractor industry, which Goenka said should show double-digit expansion in this fiscal year, up from the 5 to 6 percent growth in the sector that the company had forecast at the beginning of the year.
Analysts expect strong tractor sales to continue over the next few months and compensate for slow vehicle demand, which may see some pick up in the festive season from September.
"We are bullish about our future and will continue on our path of investing in that future. We are planning Rs. 10,000 crore investment in the next three years, including a new auto plant," M&M chairman and managing director Anand Mahindra told shareholders at the company's 67th annual general meeting (AGM) in Mumbai.