Maruti Suzuki net profit down 3pc
New Delhi, April 29, 2012
India's biggest carmaker Maruti Suzuki said yesterday quarterly net profit slipped by three per cent, but it still beat analysts' forecasts after sales rebounded in Asia's third-largest car market.
India, one of the world's fastest-growing car markets in recent years, suffered from a sharp slowdown in demand in 2011 but buyers have flocked back to automobile showrooms in the past few months as consumer sentiment brightened.
Maruti, 54.2 per cent owned by Japan's Suzuki Motor, said net profit fell to 6.4 billion rupees ($122 million) in the three months to March from a year earlier, marking its third straight quarterly profit fall.
But 'profit was higher than anticipated,' noted Dipen Shah, head of fundamental research at India's Kotak Securities.
'After going through a difficult patch, we expect the company's performance to improve in the current fiscal year,' he said.
Maruti, battling fierce competition from South Korea's Hyundai and other rivals, outstripped market expectations that it would post a net profit of around 5.6bn rupees for the fourth quarter.
Revenues climbed 17 per cent to Rs114.86 billion as New Delhi-based Maruti's car sales topped 100,000 units in each of the three months of the quarter, reaching a record high of 125,952 vehicles in March.
However, for the full year, Maruti's profit fell by 29 per cent to Rs16.35 billion as the car manufacturer sold 11 per cent fewer cars than in the previous fiscal year.
The sharp decline in full-year profit came after Maruti suffered a crippling labour strike in 2011 and sales slowed, while higher commodity prices and a weaker rupee pushed up the company's costs.