Mumbai–Automobile manufacturer Mahindra and Mahindra (M&M) on Wednesday reported a rise of 12.36 per cent in its standalone net profit for the first quarter of the current fiscal.

According to the company, Q1 standalone net profit stood at Rs 955.21 crore from Rs 850.09 crore for the quarter ended June 30, 2015.

The company informed the BSE in a regulatory filing that its total revenue from operations during the quarter under review increased by 14.05 per cent to Rs 11,942.90 crore from Rs 10,470.86 crore for the quarter ended June 30, 2015.

The company said in a statement that 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 sales of tractors and two wheelers witnessed in the first quarter of 2016-17 suggests that a recovery in rural demand is now underway,” the statement said.

The company elaborated that rural demand can be expected to gather further strength in the coming months given the robust rainfall received thus far and IMD’s (India Meteorological Department) prediction of normal rains for the rest of the monsoon season.

The company cited that weak external demand, underutilised capacities and balance sheet stress have hindered domestic private investment.

“But, led by the positive outlook on consumer demand as well as renewed reform efforts by the government in recent months, business confidence is now ticking up and could lead to recovery in private capital expenditures towards the last quarter of this fiscal,” the statement added.

“Thus, even as we recognize the downside risks currently emanating from major advanced economies, our outlook on domestic growth remains positive and we look to the future with confidence.”