BENGALURU (Reuters) - Mahindra and Mahindra Ltd MAHM.NS on Friday reported a 26.5% drop in quarterly net profit as the company struggled to sell cars, trucks and tractors amid a slowdown in Asia's third-largest economy.
Unit sales at the maker of popular sports utility vehicles like Scorpio and Thar dropped 21% for the quarter, with the industry facing issues of credit crunch, higher insurance costs and a shift towards ride-hailing services.
Last month, larger rival Maruti Suzuki India MRTI.NS flagged 30.2% slide in unit sales for the September quarter.
Net profit after tax for Mahindra came in at 12.13 billion rupees ($170.36 million) for the quarter ended Sept. 30, compared with 16.49 billion rupees during the same period last year, the Mumbai-based company said.
It, however, beat analysts’ average estimate for a profit of 11.50 billion rupees, according to Refinitiv data.
India’s passenger vehicle sales shrank 23.7% in September, making it the eleventh straight month of declines, and prompted an industry body to warn of more job cuts if sales did not pick up soon.
The company, which has cut 1,500 jobs or 5% of its workforce, had warned in September that more such cuts could be on the way in the fiscal year if the slowdown persisted.
Revenue from operations fell 14.7% to 11.08 billion rupees.
($1 = 71.2030 Indian rupees)
Reporting by Philip George and Chandini Monnappa in Bengaluru; editing by Uttaresh.V
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