Mahindra Set for Biggest Drop in Decade as Earnings Disappoint
The stock tumbled 7.2% after the Indian automaker reported a surprise drop in its December-quarter earnings.
(Bloomberg) -- Mahindra & Mahindra Ltd. shares headed for their steepest decline in more than a decade after the Indian automaker reported a surprise drop in its December-quarter earnings.
The stock tumbled 7.2% to 528.2 rupees at 3:21 p.m. in Mumbai, set for the steepest fall since August 2009, and the worst performance on the 16-member gauge of automakers. Other companies on the index -- Motherson Sumi Systems Ltd. and Eicher Motors Ltd. -- slumped by more than 3%.
Net income for the third quarter was 3.06 billion rupees ($43 million) after the Mumbai-based company took an impairment on some of its investments, according to a filing on the weekend. Analysts predicted a profit of 9.14 billion rupees, according to a Bloomberg survey.
A widespread slump in consumer demand in an economy that is set to grow at the slowest pace in a decade has hit sales of vehicles. Total car sales for the industry in January were 8% lower from a year ago, an industry body said Monday, extending the slide seen in 2019.
“The overall demand environment hasn’t seen any improvement due to a slump in economic growth,” said Naveen Kumar Dubey, Mumbai-based analyst with Narnolia Securities Ltd. “A drop in the commercial vehicle segment, apart from the impairment on investment, is weighing on investor sentiment.”
To contact the reporter on this story: Nupur Acharya in Mumbai at nacharya7@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Anto Antony, Ravil Shirodkar
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