High input cost and forex losses led to 2.8% drop in Mahindra & Mahindra's net profit for the second quarter at Rs 737.4 crore against the corresponding quarter last year.
This was despite a 14% growth in sales of its mainstay utility vehicles and a 28.5% growth in tractor sales during the quarter.
Raw material costs went up by 24% at Rs 4,708 crore during the quarter from a year ago, while the company suffered a forex losses of Rs 32 crore on account of rupee depreciation.
M&M issued a cautious outlook. "Faced with a deteriorating global macro environment... business confidence has weakened considerably this year. Investment outlays are witnessing a significant moderation, which does not bode well for future growth," it said.