Mahindra and Mahindra has reported 3.35 per cent decline in standalone net profit at Rs 852.2 crore for the first quarter ended June 30, hurt by slowdown in automotive and farm equipment segments.
Weak monsoon rains, essential for irrigating the majority of farmland, have affected the incomes of farmers in several parts of the country, leading to lower tractor sales.
"This has also lowered Mahindra's tractor sales, which the company expects to continue to stay weak in the quarter that started on July 1," V Parthasarthy, the company's chief financial officer, told reporters in Mumbai.
Quarterly profit at India's top utility vehicle maker fell to Rs 852.2 crore ($133.55 million) from Rs 881.78 crore in the year-ago quarter, Mahindra told the stock exchanges in a statement.
Net sales during the period under review stood at Rs 9,708.05 crore against Rs 10,006.85 crore in the year-ago quarter, down 2.9 per cent.
Mahindra has also been slow to launch new vehicles, losing market share to global rivals, such as Renault SA and Ford Motor Co. It will now also face competition from market leader Maruti Suzuki India Ltd and Hyundai Motor Co, which recently launched their first SUV.
"Mahindra expects its two new SUV launches this year to drive volumes and recover lost market share," said Pawan Goenka, executive director and head of the auto and farm unit.
Sales of Mahindra's passenger vehicles in India fell more than 7 per cent to 53,479 during the quarter, versus the corresponding period a year ago, industry data showed. Tractor sales fell 18 per cent to 59,150 units over the same period.
Shares of the company closed 0.47 per cent lower on the Bombay Stock Exchange on Friday.