The standalone net profit during FY11 for the company was reported at Rs 2,662.1 crore with a growth of 27.5%, when compared to the previous year. The revenues went up by 26.3% over the year to Rs 23,493.7 crore. Other income increase from Rs 199.35 crore in FY10 to Rs 309.52 crore in FY11. The operating profit margin of the company reduced by 0.9 percentage points over the previous year.
Net profit as reported for the March quarter of FY11 was at Rs 606.5 crore with a growth of 6.4%, year-on-year. The revenues for the same period was up by 27.8% year-on-year to Rs 6,778.1 crore. During the same period expenses went up by 32.7% year-on-year to Rs 5916 crore. Interest expense also increased during the quarter. Operating profit margin fell by 2.9 percentage points.
In its outlook, the company stated, “With both input costs and interest rates rising, the current economic environment is quite clearly challenging. However, the company through its continuous focus on new product introduction, process innovation and cost control, expects to rise to this challenge adequately."
Tulsian told a leading business channel in India, "In M&M I don't think that there is any disappointment, because though I agree that we have all these concerns and the market is closely analyzing the quarter results, which will happen may be during the day once the results are out and effect of that may be seen till tomorrow."
He also said that going forward a good monsoon can always bring a positive surprise for the company.
Also the stake in the Mahindra & Mahindra Finance and Tech Mahindra, will play an important role on the valuation of the company. He further added, “I don't think that investor should really worry on a quarter on quarter performance."
Tulsian suggested a target price of Rs 800. And suggested that a stop loss should be placed at Rs 692-693, as there maybe high volatility.
This is a fundamentally a strong company. And considering that it has substantial share in Mahindra & Mahindra Finance and Tech Mahindra. Valuing the company only on its core competency may not be the beast way forward. And as Tulsian mentioned that the upcoming monsoon will be the company's favor. The stock should provide with some opportunistic buy due to over the next few trading sessions. Keep a track of the stock and buy at when .
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