In earnings, Mahindra and Mahindra has fallen behind. While the car company did brisk business, higher raw material costs ate into earnings. Mahindra also said it could not pass on those costs to consumers, who’re already taking a beating from high interest rates. The firm’s net profit rose just 6.3% to Rs607 crore, below most estimates. Sales shot up 27% to Rs6,680 crore. India’s car industry is expected to see a slump in demand because of rising interest rates and higher prices of fuel. Shares of Mahindra went into reverse gear, losing 5.34% to 664. 60.
Moving on to Anil Ambani’s Reliance Communications. Falling subscriptions and lower revenues from users have taken their till on the company. Net profit plummeted a full 86% in the fourth quarter to Rs169 crore. Reliance Communications got fewer new subscribers than rivals like Vodafone. And even when it got customers, it made less money from them. The company’s average revenue per user fell 23% to Rs107.
In other news, the country’s struggling national carrier Air India is hoping to take the sting out of rising fuel costs. The airline already owes oil companies some twenty-four hundred crores for fuel. But now it’s looking for a breather. Air India has asked oil firms to give it the same discounts private airlines with similar systems get. Currently, private carriers get a Rs5,000 discount per kilolitre compared to the meager Rs1,400 per kilolitre Air India receives.
Indian markets fell into losses, after two days of gains. Poor earnings like those of Mahindra helped drag shares down. But Monday’s losses were still relatively modest. The Sensex fell 34 points to 18,232. And the Nifty went down three to 5,473.