Mahindra profit increases as SUV, tractor sales gather speed

Mahindra & Mahindra, India's largest maker of sport utility vehicles and tractors, reported first-quarter profit rise of 8 per cent as it sold more pick-up trucks and SUVs. Net income, excluding subsidiaries, increased to Rs6.05 billion (Dh504 million) in the three months that ended on June 30 from Rs5.62 billion a year earlier, the Mumbai-based company said in a statement yesterday. That compares with the Rs6.12 billion median of 32 analysts' estimates compiled by Bloomberg. Sales climbed 30 per cent to Rs66.7 billion. Mahindra, which has added Genio and Maxximo pick-up trucks to its range of cargo vehicles this year and introduced the Verito sedan under its own brand, posted a 21 per cent increase in local vehicle sales in the quarter. The company, which gets about 27 per cent of its revenue from selling farm equipment, sold 20 per cent more tractors in the period as higher agricultural output and rising commodity prices boosted demand. Its shares gained 2.3 per cent to Rs668.25 at the 3:30pm close in Mumbai, while the Bombay Stock Exchange's benchmark Sensitive Index declined 1.8 per cent.The company completed the purchase of a 70 per cent stake in Pyeongtaek, South Korea-based Ssangyong Motor Co this year.The Reserve Bank of India has raised key interest rates 1.75 percentage points this year to rein in inflation, driving down demand for cars in a country where about 80 per cent of purchases are funded by loans. The Society of Indian Automobile Manufacturers last month cut its growth forecast to 10 per cent to 12 per cent for the year ending March 31 from an earlier estimate of 16 per cent to 18 per cent.The increases in lending rates will lead to an "adverse impact on domestic demand and industrial growth", Mahindra said in a statement. From / Gulf News