(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), while analysts, on average, expected profit to dip 1.7% to 33.92 billion rupees, 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%.
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%.
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% on the back of a good monsoon, up for a second straight quarter, after a 7% 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% to 275.53 billion rupees, topping analysts’ estimates of 269.17 billion rupees.
Mahindra’s shares were little changed after reporting its results and were last down 0.6%.
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)
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