Mahindra Q2 net down 6.4%, shares fall

Written by Reuters | Updated: Jul 30 2007, 18:37pm hrs
Mahindra & Mahindra Ltd., top utility vehicle and tractor maker, on Monday reported a surprising 6.4 percent fall in quarterly net profit, sending its shares down by nearly 3 percent on the day.

Indian auto makers have been battling higher prices of raw-materials and firm interest rates that have slowed demand, particularly for commercial vehicles.

Mahindra said a firmer rupee also hit export earnings.

Mahindra, which makes the Logan sedan in a joint venture with France's Renault, said net profit fell to 1.91 billion rupees in the fiscal first quarter to end-June from 2.04 billion a year ago.

Net sales rose to 26.13 billion rupees from 22.36 billion.

That compared with a Reuters poll forecast of a net profit of 2.09 billion rupees on sales of 25.44 billion rupees.

Its operating margin, a key gauge of profitability, fell to 10.6 percent from 11.3 percent a year earlier.

Mahindra's full-year net profit is forecast to rise 4 percent to 10.49 billion rupees.