MUMBAI, Aug 7 (Reuters) - India’s Mahindra & Mahindra Ltd on Friday reported a fall in net profit for the April-June quarter as a slowdown in India’s rural economy hit sales of its utility vehicles and tractors.
Weak monsoon rains, essential for irrigating the majority of India’s farmland, have affected the incomes of farmers in several parts of the country, leading to lower tractor sales.
This has also lowered Mahindra’s tractor sales, which the company expects to continue to stay weak in the quarter that started on July 1, V Parthasarthy, the company’s chief financial officer, told reporters in Mumbai.
Quarterly profit at India’s top utility vehicle maker fell to 8.52 billion rupees ($133.55 million) from 8.82 billion in the year-ago quarter, Mahindra told the stock exchanges in a statement.
Analysts expected the company to have a net profit of 7.56 billion rupees on average, according to Thomson Reuters I/B/E/S.
Net sales fell 3 percent to 97.1 billion rupees.
Mahindra has also been slow to launch new vehicles, losing market share to global rivals, such as Renault SA and Ford Motor Co.
It will now also face competition from market leader Maruti Suzuki India Ltd and Hyundai Motor Co, which recently launched their first SUV.
Mahindra expects its two new SUV launches this year to drive volumes and recover lost market share, said Pawan Goenka, executive director and head of the auto and farm unit.
Sales of Mahindra’s passenger vehicles in India fell more than 7 percent to 53,479 during the quarter, versus the corresponding period a year ago, industry data showed. Tractor sales fell 18 percent to 59,150 units over the same period. ($1=63.7950 Indian rupees) (Writing by Aditi Shah; Editing by Clarence Fernandez)