* Q4 profit beat estimates, helped by tax write-back
* Shares in Mahindra closed at a record after results
* Analysts say El Nino could affect tractor sales
(Adds financial details, company comments, background)
By Aradhana Aravindan and Aditi Shah
MUMBAI/NEW DELHI, May 30 Indian vehicle
manufacturer Mahindra and Mahindra Ltd posted a better
than expected fourth-quarter profit as rising tractor sales
outweighed declining demand for its passenger vehicles.
The world's largest tractor maker by volume benefited from
strong rains last year that helped boost rural incomes. India
still relies on monsoon rains to irrigate more than half of its
Shares in Mahindra soared 5 percent on Friday to close at a
record high of 1,235.50 rupees in a flat Mumbai market.
Indian companies are hoping for an economic turnaround after
Narendra Modi won a thumping election victory this month with a
pledge to boost growth and create jobs.
"Overall our current outlook is tinged with optimism as we
await the economic policies of the new government," the company
said in a statement on Friday.
Mahindra's net profit for January to March, its fiscal
fourth quarter, rose marginally to 8.97 billion rupees ($152
million) from 8.89 billion rupees a year earlier. Net sales rose
4.7 percent to 108.38 billion rupees.
Analysts had expected a profit of 8.12 billion rupees,
according to Thomson Reuters data. Profit for the quarter was
bolstered by a one-time tax write-back of 2.14 billion rupees.
Analysts have warned that tractor and utility vehicle sales
growth could soften in the year ending in March 2015 if an El
Nino weather phenomenon develops as indicated by the U.N.
weather agency and disrupts the monsoon.
Sales of Mahindra's tractors in the domestic market rose 22
percent in the full fiscal year, while sales of its passenger
vehicles, which include SUVs, fell 18 percent, hit by high
interest rates and fuel costs in a sluggish economy.
Increased competition from companies such as Ford Motor Co.
and Renault SA has hurt Mahindra, whose market
share of utility vehicles fell to 42 percent in 2013-14 from
nearly 48 percent a year earlier.
The flagship company of the $17 billion Mahindra Group hopes
to recoup its market share in 2015 when it expects to launch two
compact SUVs. Mahindra also controls South Korean carmaker
Ssangyong Motor Co Ltd.
($1 = 59.0150 Indian Rupees)
(Editing by Sumeet Chatterjee and Tom Pfeiffer)