Mumbai: India’s largest maker of sport utility vehicles (SUVs) and tractors, Mahindra and Mahindra Ltd said earnings fell for the third straight quarter as it paid more for raw materials and incurred a foreign exchange loss.

Net income in the second quarter fell 21% to Rs227 crore, or Rs7.07 per share, from Rs286 crore, or Rs10.69, a year earlier, the Mumbai-based company said in a release on Wednesday. Sales in the three months ended 30 September gained 10% to Rs3,090 crore.

Expansion plans: Pawan Goenka, president of Mahindra and Mahindra’s automotive business, said the firm is looking to purchase motorcyle makers in China, South-East Asia and Europe. Ashesh Shah / Mint

“Nobody is going to benefit because of commodity prices, at least for the next two quarters," said Jinesh K. Gandhi, a Mumbai-based analyst at Motilal Oswal Securities Ltd. “Sales will also be affected by the economic slowdown. There will be pain." He has a “buy" rating on Mahindra.

Steel prices last quarter gained as much as 33% while rubber prices rose by 29%, according to Gandhi. Mahindra rose 8.2% to Rs302.05 at the close of Mumbai trading, having declined 65% this year.

Vehicle sales increased 10% to 63,045 trucks, SUVs, cars and three-wheeled auto-rickshaws in the last quarter, according to monthly statements from the company. Tractor sales in the last quarter increased 4.2% to 23,154.

The global financial market turmoil affects growth prospects and uncertainties are continuing, the company said in the statement. Mahindra and Mahindra will focus its attention on controlling expenses and improving efficiencies.

The company said it incurred a foreign exchange loss of Rs118 crore in the July-September period because of the rupee’s decline against the dollar. The rupee fell 9.2% in the three months through September, its biggest quarterly loss since March 1992.

Mahindra and Mahindra in July took control of Kinetic Motor Co. Ltd, the company’s first purchase of a bike maker, to tap the world’s second largest motorbike market. The Indian government expects two-wheeler sales to rise 10% annually until 2015.

The company is also looking to purchase motorcycle makers in China, South-East Asia and Europe, Pawan Goenka, Mahindra’s president in charge of the automotive business, had said on 3 September. In August, Mahindra bought a 51% stake in a Chinese tractor company to boost its presence in the world’s fastest growing major economy.

The overseas acquisitions come as the Indian economy’s growth is slated to slow more than what was previously estimated.