Mahindra Set for Biggest Drop in Decade as Earnings Disappoint
(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.”
©2020 Bloomberg L.P.