New Delhi (Agencies): The net profit surged by 77.59 per cent for auto major Mahindra & Mahindra on Wednesday for the quarter which ended on December 31, 2010. The net profit reported at Rs 734.68 crore was on account of strong demand and diverse cost saving measures.

In a filing to the Bombay Stock Exchange (BSE), Mahindra & Mahindra said that the company had witnessed a net profit of Rs 413.70 crore in the corresponding period previous year.

The total income during the third quarter of this fiscal also increased by 36.11 per cent to Rs 6,121.09 crore from Rs 4,497.12 crore last year, it added.

"The significant growth in the profit of the company, despite the relentless increase in material costs is due to a good volume performance by both vehicles and tractors, tight control on expenses and prudent financial management resulting in lower interest costs," M&M said.

The company had sold 56,211 units of utility vehicles in the domestic market during the quarter, experiencing 62.2 per cent share in the segment.

M&M added, "While the demand for the company's products remains robust, the recent hardening in the prices of commodities and oil causes a degree of concern".

"The measures adopted by the Reserve Bank to combat inflation will necessarily result in tighter liquidity and further possibility of interest costs moving upwards."

However the company affirmed that the overall outlook for the future remains positive.