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Apr 30, 2012, 09.01 AM IST | Source: Moneycontrol.com

Maruti Suzuki Q4 net falls 3% YoY to Rs 640cr; beats street

Maruti Suzuki beat street expectations Saturday as fourth quarter net profit fell lower-than-expected 3% from a year ago to Rs 640 crore, helped by a rebound in sales and a surge in other income.

Moneycontrol Bureau

Maruti Suzuki beat street expectations Saturday as fourth quarter net profit fell lower-than-expected 3% from a year ago to Rs 640 crore, helped by a rebound in sales and a surge in other income.

Net sales for the three-month-period were up 17% year-on-year to Rs 11,486.4 crore.

On a sequential basis, the company's net profit more than trebled, while net sales were up 50% over Oct-Dec quarter.

Analysts on average had expected Maruti to report a fourth quarter profit of Rs 530 crore on revenue of Rs 12,012 crore.

"While adverse currency movements made a significant impact during the quarter, the company was able to largely offset it through localization and internal cost control," the Delhi-based company said.

Other income, which more than doubled to Rs 296.85 crore, also put brakes on the declining profits.

In the fourth quarter, Maruti's raw material costs rose 18% year-on-year to Rs 8,874.10 crore.

Its EBITDA (earnings before interest, taxes, depreciation and amortization) margin was down 270bps year-on-year, but up 200 bps sequentially at 7.3%.

Sales of passenger cars for most of last fiscal were hit by slow demand due to expensive loans and high petrol prices. That apart, a crippling labour strike at Maruti Suzuki's Manesar plant partly in second and third quarters also hurt production of its popular Swift premium hatchback.

Sales, however, rebound in Jan-March as customers rushed to book their vehicles before the excise duty hike from April. Its new Swift and compact DZire models have also clicked among customers. During the quarter, the company sold 3,60,334 units, up 4.9% year-on-year.

For the full year (2011-12), Maruti Suzuki's total sales volumes declined near 11% from a year ago to 11,33,695 units.

"We remain bullish on the long term prospects on the passenger car segment. However, we see increasing risk of the growth being shared by the new entrants with higher value added products," said Ronak Sarda, auto analyst at MSFL.

Maruti Suzuki shares closed up 1.1% at Rs 1,397.45 on NSE on Friday. The stock is up over 50% since Dec-end.

The current valuations already factor in revival in volumes and margins, feels Sarda.

Nachiket Kelkar
nachiket.kelkar@moneycontrol.com

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