Maruti Suzuki Q3 net rises 36% to Rs681 crore

Maruti Suzuki, India's biggest carmaker, has reported a 36 per cent increase in third-quarter net profit at Rs681 crore, against Rs501 crore in the October-December 2012 quarter.

Quarter-on-quarter profit growth was 1.6 per cent.

Earnings before interest, tax, depreciation and amortisation rose 2.6 per cent sequentially to Rs1,355 crore and operating profit margin slipped 20 basis points to 12.4 per cent.

Maruti, majority held by Japan's Suzuki Motor Corp, said the gains were due to favourable foreign exchange movement, higher localisation and cost reduction efforts to offset falling sales.

Sales for the October-December 2013 quarter, however, were lower by about 3 per cent at Rs10,620 crore.

"Higher localisation, favourable foreign exchange and cost reduction initiatives by the company contributed significantly to net profit," chairman RC Bhargava said.

MUL said the numbers are not comparable on year-on-year basis due to the Suzuki Powertrain merger.

Suzuki Powertrain was merged into Maruti on 3 October 2012, the results started to reflect from the fourth quarter of FY13.

During the quarter, the market share of the company increased 2.5 per cent to 42.8 per cent in the quarter gone by.

Maruti sold a total of 2,88,151 vehicles in the quarter ended December 2013, showing a negative growth of 4.4 per cent over a year ago period.

Exports dipped 38.6 per cent to 19,966 units while domestic sales slipped 0.3 per cent year-on-year to 2.68 lakh units.

Sales of utility vehicles like Ertiga, Gypsy, Grand Vitara dropped 10.2 per cent to 18,222 units while sales of compact cars Swift, Estillo and Ritz declined 13.5 per cent to 59,481 units.

Sales of mini cars, which are M800, A star, Alto, Wagon R, grew 3.6 per cent to 1.15 lakh units.

The board of directors of Maruti Suzuki has decided to expand the company's manufacturing facilities in Gujarat, more than two years after the board approved the purchase of land in Mehsana district of Gujarat.

The company had kept expansion on hold due to market conditions.

Since the approval, the company acquired approximately 640 acres of land in Becharaji and 550 acres in Vithalpur.

"The board approved implementing the expansion through a 100 per cent Suzuki subsidiary Suzuki Motors Gujarat Private Limited because it would result in substantial financial benefits to MSIL and its minority shareholders," the company said.

The subsidiary, which will involve overall investment of Rs3,000  crore, will be an exclusine manufacturer for MSIL.

"The price of the vehicles to MSIL will include only the cost of production actually incurred by the subsidiary and just adequate cash (net of all tax) to cover incremental capital expenditure requirements," the release said.