Maruti Suzuki has reported a 5.4% fall in second fiscal quarterly profit, its fifth straight such dip, after it was hit by production losses due to the recent deadly labour unrest.

Net profit fell to INR2.27bn rupees (US$42m) in the three months to September, down from INR2.4bn a year earlier and lower than market forecasts.

Analysts had expected Maruti, 54.2% owned by Suzuki Motor , to post a net profit of INR2.5bn, news agency Agence-France Presse (AFP ) reported.

In a statement, Maruti said Q2 sales rose 8.5% year on year to INR80.7bn thanks to the new Ertiga model and better returns on exports.

Unit volume in the quarter was 209,954 in India, versus 222,406 a year ago and 20,422 exports (29,901).

In the first half of fiscal 2012-13, Maruti’s sales rose 18.5% to INR186bn while net profit fell 17.5% to INR6.5bn.

Unit sales were 473,218 in India vs 473,089 in H1 2011-12 while exports slipped to 53,054 from 60,744.

AFP noted Maruti is trying to recover from its worst-ever labour unrest in July in which a manager died and nearly 100 other executives were hurt at one of its main plants.

The lockout ended in late August and Maruti reached a new contract deal with its workforce, awarding them a hefty pay rise and seeking to improve working conditions.

The firm’s fortunes have also been hit due to growing demand for cars fuelled by diesel, which is about 35% cheaper than petrol, analysts told AFP.

Maruti produces more petrol than diesel cars and said in its statement it was holding orders for 125,000 diesels.

The company earlier this month unveiled a redesigned top-selling Alto model to fight stiff competition from Hyundai and other automakers building locally like Ford, GM and Volkswagen in a still-growing market.

Sales of new cars in India are starting to slow as potential buyers hold back due to high inflation and fuel prices and costlier loans.

The Society of Indian Automobile Manufacturers this month forecast sales growth of between one and 3% for the financial year to March 2013, down from an earlier 10-12% projection.