Mahindra & Mahindra booked a rise in fourth fiscal quarter net profit but the 6.3% climb was less than analysts had estimated.

The result - INR6.1bn rupees (US$134m) on sales up 26.5% to INR66.82bn - compared with INR5.7bn a year ago, Reuters reported, adding that a Thomson Reuters StarMine analysts poll averaged an expected INR6.8bn.

Operating margin for the year ended 31 March was 14.7% versus 15.9%.

"Our expectation for a commodity price increase during this year is in fact even more increased than we have seen in the last year. Perhaps a 2% higher increase this year," Mahnidra's automotive president Pawan Goenka told Reuters.

The company, whose core business is trucks, sees pressure on operating margins as it is not able to pass on all of the higher raw material costs to its customers, group chief financial officer Bharat Doshi said.

Mahindra, which reported a 23% rise in April vehicle sales to 32,090 units, expects interest rates to be hiked by another 50 to 75 basis points this year.

In April, the company raised prices on most of its models by 1.5 to 2%.

"We don't expect significant margin pressure going forward for Mahindra. If raw material costs increase, there will be an impact, but not to the extent of other players," an analyst at PINC Research said.

Mahindra is in a better position to transfer the raw material cost increase to the end customer, the analyst told Reuters. Demand for tractors, where Mahindra is India's largest supplier, always rises in the monsoon period which hit the country's mainland ahead of schedule on Sunday.