Maruti Suzuki Q3 net down 64% on lower sales, rupee decline

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Maruti Suzuki Q3 net down 64% on lower sales, rupee decline

Maruti Suzuki India's net profit for the third quarter plunged 64% from a year ago to Rs 205.62 crore, hurt by a sharp depreciation in the rupee and a decline in sales.

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Maruti Suzuki India 's net profit for the third quarter plunged 64% from a year ago to Rs 205.62 crore, hurt by a sharp depreciation in the rupee and a decline in sales. The labour unrest at its Manesar plant in October also hurt production of some of its models, including one of its top selling compact car Swift, which further dented earnings.

"The depreciation of the rupee during the quarter adversely impacted the bottom-line through higher cost of imports for the company and its vendors and royalty," it said on Monday.

Maruti Suzuki pays a royalty to its Japanese parent Suzuki Motor Corp.

The India's top passenger car maker reported better-than-expected net sales of Rs 7,663.64 crore, down 17.4% year-on-year in October-December.

Analysts on average were expecting Maruti Suzuki to report a net profit of Rs 200 crore on revenue of Rs 7,463 crore, according to a CNBC-TV18 poll. 

After accelerating over 30% in 2010-11, passenger car sales have hit rough road this fiscal due to expensive loans and high petrol prices. Society of Indian Auto Manufacturers (SIAM) expects Indian auto sales will grow at best 2% in 2011-12. The small car segment, where most of the models are sold with petrol engines, is among the worst hit. Maruti Suzuki is the dominant player here with models like Alto, A-Star, WagonR, Ritz and Estilo.

During the three-month period, Maruti Suzuki sold 211,803 units in the domestic market, down 29.2% from a year ago. Its exports were down 11% to 27,725 units.

"Unit sales in the quarter were impacted by sluggish market conditions caused by higher fuel prices and interest rates. Additionally, the company lost around 40,000 units in production due to the industrial relations problem at Manesar," it said.

The sharp increase in petrol price, meanwhile, has fuelled demand for diesel cars. Maruti Suzuki had said earlier that majority of new bookings for the Swift were for its diesel variant, which has increased the waiting list sharply. Maruti Suzuki recently signed a deal with Fiat India to source 100,000 diesel engines per year for the next three years.  

Meanwhile, Maruti Suzuki's operating profit margin was at 5.2% in third quarter, compared with 9.4% year-on-year.

its interest expenses during the quarter jumped to Rs 17.4 crore, from Rs 36 lakh. Its other income was up 23% year-on-year to Rs 160.4 crore. Tax Expenses in Oct-Dec were also sharply lower at Rs 55.68 crore, from Rs 227.6 crore in the year ago quarter.

Maruti Suzuki shares were initially trading down 2%. But they recovered their losses shortly post the earnings and at 14:35 hrs, the stock was up 2.5% at Rs 1,130.65 crore on NSE.

Nachiket Kelkar
nachiket.kelkar@network18online.com

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