Mahindra and Mahindra (M&M) recorded a rise in net profit to at Rs. 413.70 crore in the third quarter of the current financial year against Rs. 43.60 crore in the same period in the previous year.

The ten times rise in profit was due to many factors including, good performance in the automotive and farm equipment sectors. Other factors which helped the company gain profits include a low base effect in the third quarter last year.

The government stimulus package along with the available consumer finance also helped the industry perform better in the quarter. The commodities prices were also recorded lower than in the previous quarters.

The sales for the company rose more than half to Rs 4,478 crore in the third quarter. The profit before tax & interest stood at 10.8% of net sales which is much lower than the street expectations.

The Gross revenues and other income rose 51 per cent to Rs. 4,920.30 crore in the quarter from Rs. 3,255.10 crore while the profit before tax grew to Rs. 587.30 crore from Rs. 54.80 crore.

During the first nine months of the current financial year, on stand alone basis, the net profit rose to Rs. 1,517.50 crore from Rs. 418.80 crore and the gross revenues and other income recorded a growth of 36.4 per cent to Rs. 14,788.80 crore against Rs. 10,843.70 crore recorded in the corresponding period in the previous year.

As for the results of the whole group, excluding that of Mahindra Satyam, the net profit stood at Rs. 557 crore against Rs. 145 crore. A stock split has been approved by the board of the company on Monday of the equity shares of the face value of Rs. 10 each into two shares of the face value of Rs. 5 each.

The results were below the market expectations and hence the company stocks recorded a fall of over 5% by the close of the trading even as it gained some points before the announcement.

M&M controls nearly half of the domestic tractor market and enjoys significant pricing power in the segment. The farm sector as a whole is expected to grow in the financial year 2011. Some technical experts have raised doubts over the prospect of growth in the automobile sector as the low base effect will be available in the next quarters.