He made an overall loss of about ₹5,079, which is about 3.08%.
The two selling prices are equal, but the two cost prices are not — so work each one out first.
Buffalo 1 (5% profit): SP = 105% of CP
1.05 × CP₁ = 80,000 → CP₁ = 80,000/1.05 = ₹76,190.48
Buffalo 2 (10% loss): SP = 90% of CP
0.90 × CP₂ = 80,000 → CP₂ = 80,000/0.90 = ₹88,888.89
Total cost price = 76,190.48 + 88,888.89 = ₹1,65,079.37
Total selling price = 80,000 + 80,000 = ₹1,60,000
Loss = 1,65,079.37 – 1,60,000 = ₹5,079.37
Loss % = 5,079.37 / 1,65,079.37 × 100 = 3.08%
Why it happens: It is tempting to say “+5% and –10% average out to –2.5%”. They do not, because the two percentages sit on different bases. The buffalo sold at a loss had cost him ₹88,889 — far more than the ₹76,190 buffalo — so the 10% loss is taken on a bigger amount than the 5% profit. Percentages can only be added when they refer to the same whole; here they refer to two different cost prices.
Check it yourself: Profit on the first = 80,000 – 76,190.48 = ₹3,809.52. Loss on the second = 88,888.89 – 80,000 = ₹8,888.89. The difference, 8,888.89 – 3,809.52 = ₹5,079.37, is the overall loss.