Mahindra & Mahindra on Wednesday reported a 20.7% decline in second quarter net profit at Rs 226.7 crore against Rs 285.9 crore in
the same period last fiscal, weighed down by costlier raw material and a foreign exchange loss. The utility vehicle and tractor major spent 24% more for steel, rubber and other raw materials in the quarter after commodity prices gained. Total raw material costs increased to Rs 2349.7 crore from Rs 1889.8 crore in Q2 of 2007-08.
Net sales for the company in the July-September'08 quarter grew to Rs 3092.9 crore from Rs 2704 crore in the same quarter last year.
The global financial market turmoil affects growth prospects and uncertainties are continuing, Mahindra said in a statement on Wednesday. Mahindra will focus its attention on controlling expenses and improving efficiencies. The company said it incurred a foreign exchange loss of Rs 118 crore in the July-September '08 period because of the rupee's decline against the US dollar. The rupee fell 9.2% in the three months through September, its biggest quarterly loss since March 1992.
In the automotive sector M&M's export during the quarter grew 6.6% to 2,941 vehicles. Shares of M&M were trading at Rs 305.05, up 23% in the late afternoon trade on the BSE.
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