India's largest passenger car maker Maruti Suzuki on Friday said net profit in the third quarter more than doubled year-on-year to Rs 501 crore, helped by strong sales growth, led by the diesel powered Ertiga multi-utility vehicle and the compaft DZire sedan. Its first profit rise in six quarters sent its shares surging to a three-year high.
The company's net sales in Oct-Dec were up 46 percent froma year ago to Rs 10,957 crore.
Analysts on average were expecting Maruti to report a net profit of Rs 480 crore on revenue of Rs 10,970 crore.
Maruti Suzuki has had tough times over the last one year. While sales, especially of petrol driven vehicles, remained sluggish, there were several instances of labour strikes at its Manesar plant that hit production.
In the year-ago quarter too the company lost production of around 40,000 units due to strike. A labour unrest at the plant in July last year left a human resources manager dead and several other executives injured. The plant remained shut for around one month post the violence.
Return to full scale operations at Manesar this quarter and demand for new Swift, DZire and Ertiga have given it a big boost. The Ertiga was launched in April 2012 and the new compact DZire was introduced in Feb 2012.
Maruti Suzuki sold 2.69 lakh units in Oct-Dec in the domestic market, up 27 percent, while exports rose 17 percent to 32,496 units.
Operating profit margin last quarter improved 270 basis points to 7.9 percent and earnings before interest, tax, depreciation & amortisation (EBITDA) jumped to Rs 890 crore from Rs 417 crore.
"Maruti Suzuki reported strong performance in Q3, mainly on operational front, helped by better product mix and regular price hiking strategy. Moreover, its raw material cost was under control, in spite of higher vendor compensation paid in the quarter," noted analyst Mitul Shah of Karvy Stock Broking.
He says that the recent depreciation of the Yen against the US dollar would act as a "game changer" for the company as every 1 percent change in Yen to US dollar translates into 20 bps benefit on Maruti's margins.
Meanwhile, Maruti's other income during the quarter increased to Rs 189 crore from Rs 175 crore, while finance costs increased to Rs 46 crore from Rs 18 crore.
Maruti Suzuki shares rose over 4 percent to a high of Rs 1,606 on NSE. It finally closed at Rs 1,599.45, up 4 percent.