Mahindra & Mahindra  has reported a surge in its second quarter profits on the back of a strong performance at both its automotive and farming divisions.

The Indian group said that the net profit for the quarter was INR7.02bn (US$149m) versus INR2.05bn in Q2 last year - a growth of 241.7%.

Gross revenues and other income rose to INR51.89bn, up from INR39.35bn during the corresponding period last year - a growth of 31.9%.  Profit before tax excluding exceptional items for the quarter leapt 266% to INR8.62bn.

"The outstanding financial results of the company for the quarter are largely due to a strong sales performance by both automotive and farm equipment sectors and the company's continued and relentless focus on cost reengineering and cost control," a statement said.

The company recorded a volume growth of 43.7% in the utility vehicles segment against an industry growth of 21.4%.

For the first half net profit rose 194% to Rs11.03bn.

"Industrial activity in India is witnessing an encouraging re-bound. After rising barely by one percent in the eight months between Oct 2008 and May 2009, industrial production grew by a robust 8.6%, year on year, between June-August 09. The sharp pick up in the growth of consumer durables in the current fiscal, from 6% in April to August 2008 to 19% in April to August 2009, is indicative of rising consumer confidence and hence is particularly heartening," the statement said.

"However, the country also experienced its severest drought in recent history during the current kharif season. The adverse impact that this is likely to have on agricultural output and incomes and demand for non-agri goods and services is a source of some concern."

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