Mahindra & Mahindra, India's largest sports utility vehicle maker, fell by its biggest amount since February 8 after first-quarter profit missed analyst estimates.
Shares dropped 5.9 per cent to 663.05 rupees at the close of trading, and the company was the worst performer on the Bombay Stock Exchange's benchmark Sensitive Index. The stock has declined 15 per cent this year. Net income for the quarter was at 7.07 billion rupees, up 6.5 per cent from last year. Analysts' averaged expectations had put the company reporting profits of 6.74bn rupees. Car sales in India grew a record 30 per cent last year, driven by a growing middle class in Asia's third-largest economy after China and Japan, but higher fuel prices, rising interest rates and intensifying competition are expected to dampen demand this year.
Indian car sales are expected to halve this year with growth pegged at 12 to 15 per cent, said Pawan Goenka, the chief of Mahindra's automotive division.
Mahindra's operating profit margin in the year that ended in March narrowed to 14.7 per cent from 15.9 per cent. The company spent 33 per cent more on materials during the fourth quarter as it increased output amid rising commodity demand in China and India.
"There may be a small dip in margin on a year-on-year basis largely because of the commodity prices," said Mahantesh Sabarad, an analyst at Fortune Equity Brokers India. The analyst has a "hold" rating on Mahindra. "Commodity prices are a big challenge," he added.
Prices of steel, rubber and other materials may gain 2 per cent more this fiscal year after gaining as much as 7 per cent in the previous 12 months, Mr Goenka said.
Mahindra said earlier this year it had completed all formalities related to the acquisition of a majority stake in Ssangyong Motor and would boost product development and brand spends at the South Korean sport utility vehicle maker.
The Sensitive Index fell 0.1 per cent to 18,232.06 points.
[ halsayegh@thenational.ae ]
Biography
Favourite book: Zen and the Art of Motorcycle Maintenance
Holiday choice: Anything Disney-related
Proudest achievement: Receiving a presidential award for foreign services.
Family: Wife and three children.
Like motto: You always get what you ask for, the universe listens.
COMPANY PROFILE
Name: Kinetic 7
Started: 2018
Founder: Rick Parish
Based: Abu Dhabi, UAE
Industry: Clean cooking
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TWISTERS
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The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
Company Profile
Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
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Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
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The years Ramadan fell in May
Biog
Age: 50
Known as the UAE’s strongest man
Favourite dish: “Everything and sea food”
Hobbies: Drawing, basketball and poetry
Favourite car: Any classic car
Favourite superhero: The Hulk original
Major honours
ARSENAL
BARCELONA
- La Liga - 2013
- Copa del Rey - 2012
- Fifa Club World Cup - 2011
CHELSEA
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- FA Cup - 2018
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SPAIN
- World Cup - 2010
- European Championship - 2008, 2012
A QUIET PLACE
Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou
Director: Michael Sarnoski
Rating: 4/5
MATCH INFO
Rugby World Cup (all times UAE)
Third-place play-off: New Zealand v Wales, Friday, 1pm
Final: England v South Africa, Saturday, 1pm