M&M Q1 profit down 20% as car sales slowed ahead of GST

Excluding the impact of GST that kicked in from July 1, the company earned a profit of Rs 8.60 bn

Company News : Homegrown auto major Mahindra & Mahindra (M&M) today reported 19.79 per cent decline in its standalone profit after tax (PAT) to Rs 765.96 crore for the first quarter of the current financial year as sales were hit by GST transition.

Mahindra & Mahindra Ltd posted an about 20 per cent fall in quarterly profit on Friday, missing estimates, as sales growth in passenger vehicles slowed ahead of the transition to a new nationwide tax.

The company had posted a profit after tax (PAT) of Rs 954.95 crore during April-June period of last financial year.

Excluding the impact of the Goods and Services Tax that kicked in from July 1, the company earned a profit of Rs 8.60 billion.

Analysts on average had expected a profit of 8.93 billion rupees, according to Thomson Reuters data.

Revenue from operations during the first quarter of 2017 -18 stood at Rs 12,335.56 crore, up 3.29 per cent from Rs 11,942.9 crore the year-ago period, M&M said in a regulatory filing.

The company’s vehicle sales were at 1,12,293 units during the first quarter. It sold 81,270 tractor units during the period under review.

Elaborating on the quarterly performance, M&M said the automotive industry was impacted due to impending transition to Goods and Service Tax in the first quarter of 2017-18.

Passenger vehicles sales were adversely impacted in anticipation of a price reduction in the new tax regime and reported a nominal growth of 4.4 per cent, it said. Read more


Planning to buy a car? Get up to Rs 90,000 in discounts before GST rollout

GST rate fixed for automobiles is 28% plus cess-1% for small petrol cars, 3% cess for diesel cars

Company News : If you were prolonging your car-buying decision, it might be a good time to go ahead with your decision now as carmakers are currently offering hefty discounts between Rs 25,000 to Rs 250,000. This is because, after the goods and service tax (GST) implementation, the automotive market will see a significant difference in prices.

The GST rate fixed for automobiles is under the 28 per cent tax bracket, plus cess (1 per cent for small petrol cars, 3 per cent cess for diesel cars and 15 per cent for luxury cars. Due to this change in the tax structure, the on-road price of small diesel cars and mid-sized cars will increase by 1.6 per cent and 2.1 per cent respectively.

Here is a list of options for you:


While Hyundai Eon price in New Delhi starts at Rs 3.62 lakhs and goes up to Rs 4.97 lakhs, you can avail a discount of up to Rs 45,000.

Similarly, the Grand i10 starting at Rs 4.69 lakhs can be bought at a discount of Rs 62,000 for the petrol variant and Rs 73,000 for the diesel one.

The Hyundai i20 and the new xCent attracts a discount of Rs 25,000 on petrol and diesel variants.

The biggest discount — Rs 2,5 lakh — is on Hyundai Santa Fe, whereas, the popular Verna’s price is slashed by Rs 80,000 (petrol) and Rs 90,000 (diesel).

Additionally, Hyundai is offering 100 per cent road finance along with exchange benefits across its entire collection.

Mahindra & Mahindra

If you want to hold the steering of a Mahindra car, then here are various offers for Delhi-NCR region:

Mahindra KUV100: Prices reduced by Rs 40,000 to Rs 42,000

Mahindra TUV300: Rs 36,000 discount

Mahindra XUV500: The maximum discount is on this model with Rs 65,000 price cut.

The exchange bonus is available with Mahindra too, however, only on selected items.


The American auto giant was one of the first to give discounts to lure customers. EcoSport, the subcompact SUV gets cheaper by Rs 20,000 to Rs 30,000.

Ford’s Figo and Aspire are being offered with a price reduction of Rs 10,000 to Rs 25,000.

At present, hybrid vehicles attract excise duty of 12.5 per cent, similar to the ones for entry level small cars such as Tata Nano or Maruti Alto. Even though they are exempt from infrastructure cess, there is a 1 per cent National Calamity Contingent Duty, 2 per cent central sales tax and 12.5 per cent VAT, which takes the total incident of tax to 30.3 per cent. (Read more)

The auto industry has said that the increased tax incidence is against the government’s long-term goal of promoting green vehicles in the country.