M&M net up 16%; sets sight on driverless tractors
SHAHKAR ABIDI | Thu, 11 Aug 2016-08:40am , Mumbai , DNA
Attempting to manoeuvre ahead to competition in the race for driverless vehicles, auto major Mahindra & Mahindra on Wednesday said it intends to play a major role in manufacturing of autonomously operated tractors.
"Tractors that operate autonomously could change the future of food production. This is an area where Mahindra, as the largest tractor producer in the world, intends to play a pioneering role." said Anand Mahindra, chairman, M&M during the 70th annual general meeting held in Mumbai on Wednesday.
"It is also an area where paranoia about accidents and collisions is virtually non-existent." he said.
Though the concept for autonomously driven tractors has been in the market since 1940s, it's only in recent years that the industry has taken some serious efforts to develop it for efficient agricultural use. According to news magazine Nikkei Asian Review, the Japanese manufacturer Kubota unveiled its first driverless tractor earlier this year in January.
The tractor uses GPS to determine its location and can drive itself using data input on the shape and size of the field it is operating in. The vehicle can be used for tilling the ground and applying fertilisers and pesticides.
Driverless cars is currently the focus of innovation with quite a handful of tech and traditional auto companies investing big time on its research development.
One can easily understand M&M's push behind the autonomously operated tractors, especially since the first quarter result of FY17 whereby the figures reveal that 71,785 tractors were sold in the domestic market, with a YoY growth of 21%. The company has a market share of 43.9% in tractors.
"Given the robust rainfall received thus far and IMD's prediction of normal rains for the rest of the monsoon season, rural demand can be expected to gather further strength in the coming months, providing a much-needed boost to industrial activity in the country" said Pawan Goenka, executive director, M&M.
In the first quarter, M&M's revenue grew 14% year on year.to Rs 11,961 crore. Profit after tax increased 16% to Rs 962 crore.
Further, a total of 110,959 vehicles were sold , a yoy growth of 9.7%, out of which 55,909 were utility vehicles which grew 13%, the company said.
The automaker said despite the rising global uncertainties, India's economic recovery is slowly but surely gaining momentum. While public investment expenditures remain strong, urban demand has been picking up pace since the third quarter of the previous fiscal and is expected to receive further impetus from the Seventh Pay Commission awards, which will be given effect in the current month. More importantly, the double-digit growth in domestic tractor and two-wheeler sales witnessed in the first quarter of 2016-17 suggests that a recovery in rural demand is now underway.