Mahindra & Mahindra Ltd, India's biggest utility vehicle maker, posted a 12 per cent rise in quarterly profit, in line with analyst estimates as strong tractor sales offset slowing demand for passenger and commercial vehicles.
Mahindra's automotive division, which includes sport-utility vehicles, trucks and buses, has been hit by high interest rates and fuel costs in a slowing economy.
But the tractor business has reaped the benefits of strong rains last year that put more money in the hands of farmers.
Standalone profit rose to Rs 934 crore in the fiscal third quarter ended in December from Rs 836 crore a year earlier. Net sales fell 2 per cent to Rs 10,405 crore at Mahindra, also the world's largest tractor company by sales volume.
Analysts had, on average, forecast a profit of 9.39 billion rupees, according to Thomson Reuters.
Mahindra's domestic tractor sales jumped 22 per cent during the quarter. But SUV sales fell by about 23 per cent.
A rise in excise duty on SUVs, increased competition and a preference among car buyers for smaller SUVs have hurt the company, whose market share in the utility vehicle segment fell to 41 per cent at the end of December from nearly 48 per cent a year ago, according to industry data.
The company hopes to recoup its market share in 2015, when it expects to launch two compact SUVs, said Pawan Goenka, president of its automotive and farm equipment businesses.
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