A favourable product mix, strong demand for new products and better export realisation helped Maruti Suzuki more than double its net profit in the quarter ended December.
The carmaker, India’s biggest, on Friday reported a net profit of Rs501 crore for the quarter, compared with Rs206 crore in the corresponding quarter a year ago.
Net sales rose 45.6% to Rs10,957 crore.
New products, including multi-purpose vehicle Ertiga, entry level offering Alto 800 and compact sedan Dzire continued to see strong demand.
Domestic sales were up 27% at 268,957 units and exports up 17.2% at 32,496 units.
The growth came despite an overall slowdown in the passenger vehicle segment.
Passenger vehicles grew 8.37% in the nine months to December, according to Society of Indian Automobile Manufactures.
The industry, including Maruti Suzuki gave heavy discounts throughout the year in order to push sales.
“The company’s raw material cost was under control, in spite of higher vendor compensation paid in the quarter,” said Mitul Shah of Karvy Stock Broking.
Ebitda margin improved 275 basis points on-year and 180 basis points on-quarter to 8%.
“The growth in net profit was primarily due to higher sales and good response to new models like Ertiga and Swift Dzire. The company’s continued cost reduction efforts helped to drive profit in the quarter,” the company said.
For analysts, the growth of the market leader beat the expectations.
“The topline (up 35% qoq) was broadly in line with our estimates; bottomline was slightly ahead. Going ahead, we expect the operating performance to improve further, led by price increases carried out in January 2013 and favourable currency movement,” said Yaresh Kothari, analyst with Angel Broking.
The reduction in subsidy on diesel, however small, will augurs well for Maruti’s petrol portfolio, Mahantesh Sabarad and Vijay Nara, analysts with Fortune Securities wrote in a note.
