The Hindu Business Line : Maruti Q1 net profit zooms 63%

Double-digit growth in sales combined with cost reduction measures has enabled car maker Maruti Udyog to post a 63.19 per cent jump in net profit in the first quarter of this fiscal at Rs 369.5 crore against Rs 226.4 crore in the year-ago period.

The total income (net of excise) in the quarter ended June 30, 2006, was up 20 per cent at Rs 3,268.7 crore (Rs 2,723.6 crore).

After witnessing only a single-digit growth in sales volumes last year, Maruti's sales (including exports) increased 18.9 per cent in the April-June 2006 period at 1,44,948 units (1,21,866 units). Sales in the domestic market were up 19.2 per cent at 1,37,104 units. Sales of compact cars (Swift, WagonR and Alto) were boosted by the excise tax cut announced in the Union Budget.

Consumption of raw materials and components, spare parts, dies and moulds and stores for Maruti increased by 11.2 per cent during the quarter at Rs 2,381.2 crore (Rs 2,141.4 crore). Maruti had indicated earlier that it would be hiking car prices by this month-end to pass on some of the increased cost to the customers.

The Managing Director, Mr Jagdish Khattar, had earlier this month said the company was also cutting costs by changing its sources of steel.

More models

After launching the upgraded Wagon R, Maruti has plans to roll out more models this fiscal. This includes a diesel variant of the Swift and the MR Wagon.

The company is also believed to be working on a new model for the European markets, which would be ready by 2008-09.

The company's share closed at Rs 781.25 on the Bombay Stock Exchange on Thursday, up 2.21 per cent over the previous day's closing.

Further, Suzuki said earlier this month it would build a new compact car in India for Nissan Motor to sell in Europe.

Meanwhile, Maruti today said that Mr D.S. Brar, formerly CEO and Managing Director of Ranbaxy Laboratories, has joined the board of directors of the company as a non-executive independent director. Mr T. Kobayashi, Managing Director of MSAIL, has also been inducted as non-executive director on the MUL board.

More Stories on : Financial Performance | Cars | Performance | Maruti Udyog Ltd

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