Maruti Q3 net profit doubles, first rise in six quarters

NEW DELHI Fri Jan 25, 2013 6:46pm IST

1 of 2. A worker cleans a Maruti Suzuki Swift Dzire car as he is being reflected on a car at the company's stock yard at Sanand in Gujarat October 30, 2012.

Credit: Reuters/Amit Dave/Files

Stocks

   

NEW DELHI (Reuters) - Maruti Suzuki Ltd(MRTI.NS), India's biggest carmaker by sales volume, said its third quarter profit more than doubled, its first increase in 18 months after a torrid period marked by a strike, plant shutdowns and a demand slowdown.

The small car champion, which two years ago produced every other new car sold in India, outperformed a miserable market during the quarter to end-December, bouncing back after a deadly factory riot in July led to a $250 million production loss.

Maruti, controlled by Japan's Suzuki Motor Corp (7269.T), said profit for the Oct-Dec quarter was 5.01 billion rupees, up from 2.05 billion rupees in the same quarter of 2011. Sales rose 46 percent to 109.57 billion rupees.

Analysts had expected profit of 5.24 billion rupees, according to Thomson Reuters I/B/E/S.

Shares in the automaker ended up 3.9 percent at 1599.45 rupees, outperforming a Mumbai market that was up 0.80 percent.

Maruti sold 27 percent more cars in the quarter, helped in part by strong sales of a cheaper and more fuel-efficient version of its Alto, the world's best-selling small car, during India's October-November festival season when people typically make big purchases.

The growth in profit was primarily due to higher sales and a positive consumer response to new car models like utility vehicle Ertiga and Swift DZire low-cost sedan, Maruti said in a statement, adding that cost cuts also boosted profit.

Car sales in India so far this fiscal year are down on the previous twelve months and are on track to post their lowest growth in nine years, according to the Society of Indian Automakers (SIAM), an industry lobby group.

High interest rates, rising fuel prices and slowing economic growth is hurting India's car market, once the toast of the global industry, tempting a slew of carmakers to invest billions of dollars setting up plants.

Analysts expect Maruti to cut its capital expenditure by about 12 percent in the next 12 months, which would be the second biggest cut among 40 top Asian automobile firms, according to Thomson Reuters Starmine's SmartEstimates.

SmartEstimates accords greater weight to recent forecasts from historically more accurate analysts.

(Reporting by Anurag Kotoky; additional reporting by Patturaja Murugaboopathy in BANGALORE; Writing by Henry Foy; Editing by Daniel Magnowski)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Global Trade Deal

Global Trade Deal

Rural votes, old traumas drive India's WTO brinkmanship.`  Full Article 

E-Commerce Funding

E-Commerce Funding

E-tailer Flipkart raises $1 billion in funding.  Full Article 

Adani Project

Adani Project

Australia approves Adani's $16 bln Carmichael coal project  Full Article 

New Frontiers

New Frontiers

EXCLUSIVE - Goldman moves executive to new role building ETFs.  Full Article 

India-U.S. Talks

India-U.S. Talks

Kerry to woo Modi's India, but quick progress unlikely  Full Article 

Argentina Debt Default

Argentina Debt Default

Insight - Jaded Argentines brace for looming debt default   Full Article 

Anti-trust Probe

Anti-trust Probe

Microsoft targeted in apparent Chinese anti-trust probe  Full Article 

Gaza Conflict

Gaza Conflict

Israel strikes house of Hamas Gaza leader, digs in for long fight.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage