Tata Motors, India's biggest vehicle maker, has seen net profits fall by 30% due to high material costs and losses from changes in foreign exchange rates.
The company made 3.3 billion rupees ($US77 million; £38m) in the three months to June, compared with 4.7b rupees a year earlier.
It said price rises and cost cutting will be used to protect profits.
Tata, which bought Ford and Land Rover earlier this year, will launch what it has hailed as the world's cheapest new car, the Nano, later this year.
As well as being the country's third-largest carmaker, Tata has about 60% of India's truck and bus market.
Tata's shares have been under pressure in recent months after an overrun in costs in developing the Nano and plans for three rights issues to fund the purchase of Jaguar and Land Rover from Ford.
