Two dimensional (2-D) finite element models (FEM) are generated using two available seismic sections across the Mahanadi Basin (MB) at the east coast of India. This permits to study the interactive effect between applied stress in the direction of maximum horizontal compressive stress (SH) and variations in rock mechanical properties of several litho-units present in the basin. The SH orientation for six offshore wells in the MB known from our previous studies <Chatterjee and Mukhopadhyay, 2000> have been used as constraints for FEM. Local stress modifications due to contrast in the Young's modulus between sedimentary in-fill and the crust down to 20 km depth are investigated for two more orthogonal seismic profiles traversing the basin from onland to offshore. FEM-derived stress vectors clearly respond to variations in elastic properties of rocks corresponding to lithological interfaces in the basin and its underlying crust. Rotation of the principal stress is prominent where the stress concentration is high. Further, the stress concentration reflects the basinal configuration.