NEW DELHI: Yen’s depreciation against the rupee and a rash of successful new launches boosted Japanese auto giant Maruti Suzuki’s first quarter results for the current fiscal. The car market leader’s net profit was up 35% to Rs 500 crore for the quarter ended June 30, 2007 compared with Rs 369 crore in the corresponding period last year. Net sales rose 25.6% to Rs 3,913 crore from Rs 3,114 crore in the year ago period.
Analysts said yen’s depreciation helped the company cut costs through cheaper import of raw material. “Currency fluctuations with yen depreciating against the rupee made some raw material imports cheaper. Similarly, the dollar’s depreciation against the rupee also contributed favourably to the company’s margins. In addition, prices of raw material like aluminium had a positive impact on the company’s results,” said Amit Kasat, senior analyst, Motilal Oswal Securities.
A company spokesperson said: “Better operational efficiency, ability to cut costs, effective marketing and increase in market share by 1.9% contributed towards our high EBIDTA margins.”
The car maker’s operating profit margins for the quarter remained unchanged at 14.6%. However, the company’s operating margins increased by more than 200 basis points to 14.6% in the quarter ended June as compared to the quarter ended April. “Last fiscal in the fourth quarter, the company had reported low margins. This quarter’s performance represents an improvement,” added an analyst. The company also reported an increase of 55.7% in other income.
“New launches like Swift diesel and SX4 are premium products from the company’s stable and helped Maruti’s performance for the quarter. The company’s volume have also grown by high double-digits,” said Vaishalli Zadoo, auto analyst, Angel Broking.
At present, Maruti’s latest mid-size offering SX4 has a long waiting period as the company is facing production constraints. The company is ramping up its capacity to 3 lakh units at its Manesar plant by 2010.
During April-June 2007, the company’s sales in the domestic market, were 1.6 lakh units, a growth of 17.1% over 1.49 lakh units in the corresponding period last year. Total sales, including exports, during the said period stood at 1.69 lakh units, up 17% over April-June 2006.
“Pursuant to further disinvestment by the Government of India (GOI), the Indian promoter, the equity holding of GOI has been reduced by 5.77% and as a result the equity of non-promoters has increased,” stated a company statement. Non-promoters shareholding now stands at 41.29%.
|
