Leading automotive major, Mahindra & Mahindra has announced a lower than expected profits in the second quarter of the financial year at 7.37 billion rupees, causing its shares to crash in the domestic stock exchange.

The company had reported a profit of 7.58 billion rupees in same period previous year. The lower profits were mainly due to losses incurred on the foreign exchange market. The company suffered a loss of 320 million rupees due to the fall of rupee in September.

According to a Thomson Reuters SmartEstimate, the profits of the company were expected to be around 7.84 billion rupees. The net sales of the company rose 37.6 per cent at 73.07 billion rupees in the quarter.

"The company could maintain its profits despite the relentless increase in material costs due to good volume performance by both vehicle and tractors in a difficult market and a tight control on expenses," it said in a statement.

The company's utility vehicles sales grew 14.2 per cent to 47,523 units in the quarter. Domestic tractor sales rose 28.2 per cent at 54,585 units. The company's shares closed down 5.98 per cent at 791.05 rupees above closed down 5.98 per cent at 791.05 rupees. The shares were valued at more than $10 billion on the stack exchange.