Other income drives up Maruti net profit 18%

Maruti Suzuki India Ltd has reported an 18.02 per cent rise in its profits after tax (PAT) for the first quarter of this fiscal, despite net sales registering a mere 3.34 per cent increase.

This higher PAT – from Rs 465.36 crore to Rs 549.23 crore – has been mainly on account of a Rs 80 crore year-on-year jump in ‘other income' during the quarter.

“Our non-operating income went up by Rs 80 crore (from Rs 100.44 crore to Rs 180.07 crore). This is because of better treasury yields and capital gains on investments that accrued during the quarter. Scrap sales have also added to this,” Mr Ajay Seth, CFO, Maruti Suzuki, told Business Line.

On the other hand, the car major's net sales rose marginally from Rs 8,050.67 crore to Rs 8,319.90 crore, with total vehicle sales actually declining from 2,83,324 to 2,81,526 during April-June over the same quarter of 2010-11.

While domestic vehicle sales went up from 2,42,887 to 2,50,683 (despite a 13-day production halt due to labour unrest at its Manesar plant), exports plummeted from 40,437 to 30,843 units.

The company admitted to pressure on margins arising from higher commodity input prices and foreign exchange volatility. The market too was sluggish due to the sharp increase in fuel prices and higher interest rates, a spokesperson said.

An indication of this was a Rs 152.72-crore increase in the company's ‘stock-in-trade and work in progress' during the latest ended quarter. This was as against a reduction of Rs 54.94 crore in the corresponding year-ago quarter.

Maruti Suzuki India's shares closed at Rs 1,177.95 on the BSE, down 0.32 per cent from the previous day's closing of Rs 1,181.70.