On completion of the proposed transaction, after the statutory approvals, Otis Elevator Company's holding in Otis India will go up from 45 per cent to around 70 per cent.

The Mahindras hold their stake in Otis India through Mahindra Holdings and Finance Ltd, a fully owned subsidiary of Rs 4,225 crore auto company Mahindra and Mahindra Ltd and this partnership was established 45 years ago.

In its board meeting on Thursday, the Mahindra group decided to grant a no objection certificate for transfer of shares from the Indian promoters to the overseas parent company so that the US partner could bring in required foreign funds into the country with the approval of the Foreign Investment PromotionBoard (FIPB).

The decision is also in line with the restructuring of the businesses of the Mahindra group, said Keshub Mahindra in a statement here on Friday.

Otis Elevator Company is a fully owned subsidiary of United Technologies Corporation, a broad based multi-national company manufacturing hi-tech products such as elevators, escalators, aircraft engines, helicopters and air-conditioning systems.

Meanwhile, analysts said on Friday Mahindra & Mahindra Ltd (M&M) will report higher earnings in the first quarter of 1999-2000 (April-March) after a reversal in 1998-99.

The company has benefited from strong rural demand triggered by good agricultural output and a reviving economy, they said. "We expect a net profit of Rs 42 crore ($9.71 million) on a turnover in the region of Rs 921 crore," said Taher Badshah, auto analyst at Inquire India Equity Research.

The company had made a profit of Rs 35 crore on sales of Rs 808 crore in the year-earlier period.

M&M reports its first quarter results on July26.

Profit for the whole of 1998/99 had fallen to 2.29 billion Rupees from 2.51 billion.

In India's agrarian economy a bumper crop boosts farm incomes which in turn revive demand in the industrial sector.

The government has estimated grain output at 203 million tonnes in the 1998/99 (July-June) compared with 192.43 million in the previous year.

"We expect strong Q1 FY00 (Financial year ending March 31, 2000) results, with profit growth at over 30 percent year-on-year, based on likely better volumes by about 10 percent, a better margin and lower tax (expense)," Merrill Lynch said in a June report.

A Reuters survey last month found analysts projecting an average net profit of 467.8 million Rupees, up 33.6 percent on a year earlier. Sales were seen 11.1 percent higher.

Badshah estimated that M&M'S Utility vehicle sales had risen 15 percent to 17,628 units for the three months ended June 30 from 15,328 a year earlier, and that tractor sales had grown by over eight percent to 18,600 units from17,105.

The firm has improved its market share in utility vehicles with newer models and better efficiencies, said Nikesh Shah, research head at Triumph International Finance India Ltd.

Shares of M&M Trade at a price to earnings ratio of 15.15 against Punjab Tractors P/E of 23.48, Reuters Securities 3000 data showed. Punjab Tractors makes only tractors.