India Mahindra profit jumps

Mahindra and Mahindra Ltd. reported a near-tenfold rise in profit, but its shares fell after India's top utility vehicles maker said rising input costs and the possible end of stimulus spending could hurt its growth.

The company, which also makes tractors and light commercial vehicles, on Monday said raw material costs as a ratio to sales rose 250 basis points in the December quarter from the September quarter.
"Last quarter, the main factor for the company reporting below forecasts was the rise in raw material prices and a fall in other income," said Surjit Arora, auto analyst with Prabhudas Lilladher.
"With commodity prices still high, we expect the company's margins to be under pressure and its stock will continue correcting," he said. The board also approved a 2-for-1 stock split.
Mahindra's shares fell as much as 6.6 percent to 1,057.05 rupees, their lowest since Dec. 30, after the results. They eventually ended down 5.2 percent, their biggest daily fall in five months, at 1,072.35 rupees, their lowest close in 2010.