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

India Economy

REUTERS SHOWCASE

Reliance Projects

Reliance Projects

Exclusive: Reliance plans $13 billion projects including new refinery.  Full Article 

Chopper Deal

Chopper Deal

India nears $2.5 billion deal for Boeing military helicopters.  Full Article 

Coal Scam

Coal Scam

CBI drops coal scam case against Kumar Mangalam Birla.  Full Article 

Low Stocks

Low Stocks

Indian power station coal stocks lowest since 2012 blackouts.  Full Article 

Markets This Month

Markets This Month

Tata Motors, M&M top Sensex gainers  Full Article 

Google Drones

Google Drones

Google is testing unmanned drones to deliver anything from dog food to medicine.  Video 

#RiceBucketChallenge

#RiceBucketChallenge

In India, rice replaces ice in bucket challenge.  Full Article 

Reuters India Mobile

Reuters India Mobile

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