(Reuters) -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% to 38.41 billion rupees ($455.4 million). Analysts had estimated profit would dip 1.7% to 33.92 billion rupees, per data compiled by LSEG.
Its consolidated profit, which includes its IT, financial services, and holiday businesses, grew 35%.
Mahindra’s car portfolio is made up entirely of SUVs and the company has benefited the most from consumers’ increasing preference for the large, pricey vehicles that account for more than 50% of the country’s car sales volumes.
That has made Mahindra one of India’s fastest-growing car makers. Its SUV sales volumes rose 19% in the July-September quarter, faster than an industry-wide 9% rise.
In the same period, overall domestic car sales declined for the first time in 10 quarters.
The company expects its industry-topping volume growth to last through the year to March 2025, its auto & farm sectors CEO Rajesh Jejurikar said in a press conference on Thursday, while maintaining that full-year sales would grow in the “high-to-mid (percentage) teens.”
Strong demand for Mahindra’s SUVs helped outpace lower commercial vehicle sales, with revenue in its automotive division – its biggest business – growing 14%.
Meanwhile, revenue from its farm equipment segment grew about 10%. The business, while smaller than its automotive counterpart, is more profitable and is key to its earnings.
Its tractor sales rose 3.6% on the back of a good monsoon, up for a second straight quarter, following a 7% decline in fiscal 2024.
The ‘Thar’ SUV maker’s revenue from operations rose 13% to 275.53 billion rupees, topping analysts’ estimates of 269.17 billion rupees.
Shares were down about 1.5%.
Last month, SUV market leader Maruti Suzuki reported its slowest revenue growth in nearly three years.
($1 = 84.3500 Indian rupees)
(Reporting by Meenakshi Maidas and Nandan Mandayam in Bengaluru; Editing by Sonia Cheema and Janane Venkatraman)
