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M&M quarterly profit falls the most in over six years

A customer walks inside a Mahindra cars showroom in Chandigarh November 26, 2012. REUTERS/Ajay Verma/Files

NEW DELHI (Reuters) - Mahindra & Mahindra Ltd , India's top utility vehicle maker by sales, reported on Friday its steepest fall in quarterly profit in more than six years, hit by poor sales in rural areas where unseasonal rains have hurt farm incomes. Mahindra's standalone profit for the fourth quarter ended March fell 39 percent to 5.51 billion rupees ($86.4 million) from a year earlier. This is the steepest fall since December 2008 when the company reported an 89 percent drop in quarterly profit. The profit of 5.51 billion rupees is also the lowest since end-December 2009, Reuters data showed. Analysts, on average, had expected a profit of 5.91 billion rupees, according to Thomson Reuters I/B/E/S. Storms and unseasonal rains have badly damaged over 10 million hectares (24.7 million acres) of crops, mostly in large parts of northern India. Dozens of farmers have committed suicide in recent weeks and many others are reeling under debt. Shares of Mahindra, the world's largest tractor-maker by volume, surprisingly ended 5 percent higher at 1,258 rupees after the numbers. Analysts attributed this to higher-than-expected net sales and an improvement in realisations in the automotive and farm equipment sectors. "We are impressed by the operational performance... which we believe marks a bottom for the company and expect times to improve here on," Reliance Securities, a Mumbai-based broker, said in a note. The company's net sales fell 13 percent to 94.12 billion rupees. Analysts, on average, expected revenue of 89 billion rupees, according to Thomson Reuters I/B/E/S. ($1 = 63.8000 rupees) (Reporting by Aditi Shah, Additional reporting by Shilpa Murthy in Bengaluru; Editing by Anand Basu and Prateek Chatterjee)