FILE PHOTO: A man stands next to a screen displaying Mahindra's logo at Bharat Mobility Global Expo organised by India's commerce ministry at Pragati Maidan in New Delhi, India, February 1, 2024.
Credit: REUTERS/Anushree Fadnavis
Indian automaker Mahindra & Mahindra reported a surprise rise in second-quarter profit on Thursday, helped by higher sales of its sport utility vehicles (SUV) and a recovery in tractor demand.
The 'Scorpio' SUV maker's standalone profit after tax rose 13.2 per cent to Rs 3,841 crore ($455.4 million), while analysts, on average, expected profit to dip 1.7 per cent to Rs 3,392 crore, per data compiled by LSEG.
Mahindra, whose car portfolio is made up entirely of SUVs, has benefited the most from consumers' increasing preference for the large, pricey vehicles, which account for over 50% of the country's car sales volumes.
That has made the company one of India's fastest-growing car makers, with a market share of 13 per cent.
It reported a 19% rise in SUV volumes in the second quarter, while industry-wide volumes declined for the first time in over two years.
Indeed, the strong demand for Mahindra's SUVs helped outpace lower commercial vehicle sales, with revenue at its automotive division, its biggest business, growing 14 per cent.
Meanwhile, the company - India's market leader for tractors - said its revenue from its farm equipment segment grew about 10%.
Its tractor sales rose 3.6 per cent on the back of a good monsoon, up for a second straight quarter, after a 7 per cent decline in financial year 2024.
The segment, while smaller than its automotive counterpart, is more profitable and is key to its earnings.
The 'Thar' SUV maker's revenue from operations rose 13 per cent to Rs 27, 553 crore, topping analysts' estimates of Rs 26,917 crore.
Mahindra's shares were little changed after reporting its results and were last down 0.6 per cent.
Last month, SUV market leader Maruti Suzuki reported its slowest revenue growth in nearly three years. ($1 = 84.3500 Indian rupees)