(Reuters) -Indian automaker Mahindra & Mahindra reported a 19% rise in quarterly profit on Friday, driven by strong sport utility vehicles sales and said it would separately account and report the low-margin earnings of its electric SUVs from the current quarter.
The ‘Scorpio’ SUV manufacturer reported a profit of 29.64 billion rupees ($339 million), up from 24.90 billion rupees a year before.
Mahindra is India’s top SUV maker by revenue and also leads sales of tractors. Its SUV volume grew 20% in the quarter, as did those of its tractors.
Rising farm incomes have helped boost tractor demand, while surging demand for its ‘XUV 3×0’ model and a five-door version of its popular ‘Thar’ SUVs have helped Mahindra sail through an otherwise turbulent year for Indian carmakers.
Its overall volume increased 17% in the quarter, leading revenue 20% higher to 305.38 billion rupees.
The tractor business, while smaller in revenue, is more profitable than Mahindra’s automotive business that houses the SUV, trucks, buses and three-wheeler manufacturing businesses.
Higher tractor sales helped boost the operating margin to 15.5% from 14.2%.
Mahindra’s consolidated profit, which includes its financial services, IT, hospitality and a handful of other businesses, rose about 20%.
Mahindra will begin to account for its electric vehicle business in its earnings statement from the current January-March quarter, it said.
The separate accounting was necessary to factor in the smaller margins currently earned on EVs, the company added.
The automaker will produce the EVs as a contract manufacturer for Mahindra Electric Automobile Ltd (MEAL), its Temasek-backed EV unit. MEAL will sell the models to dealers.
Bookings for its new electric SUVs – the BE6 and XEV 9E – open on February 14, while deliveries of select variants will start by mid-March. The company currently sells one electric SUV in the market, the XUV400.
Mahindra’s shares closed up 1.9%.
($1 = 87.4010 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Eileen Soreng)
