Maruti net up 42% in Q1 to Rs 171 crore

Maruti Udyog Ltd, the country's largest car maker, posted a 42 per cent increase in its net profit at Rs 170.9 crore in the first quarter ended June 30, 2004, compared with Rs 120.2 crore during the same period last year.

This was on a 24 per cent growth in turnover to Rs 2,515 crore.

The company sold 123,624 units during the three months, representing a growth of about 19 per cent over the same period last year. This included exports of 12,240 units.

Maruti said the growth in profit was despite a sharp increase in prices of raw materials like steel, and the price cuts it effected on its compact car Alto.

While the domestic passenger car industry grew by 19.4 per cent in Q1, MUL's passenger car sales went up by 21.1 per cent.

In a statement issued today, Maruti attributed its better performance and higher sales volumes during the quarter to the on-going program to enhance productivity and reduce costs across the value chain.

The company's market share in the passenger car segment increased marginally from 55 per cent in Q1 last year to 55.8 per cent this year.

In a bid to increase its supply chain efficiency, Maruti slashed the number of vendors to 220 from 350 two years back.

Lowering the time and cost involved in dealing with more vendors has helped the company increase its our supply chain efficiencies. The move has provided the smaller group of vendors the requisite volumes to realise economies of scale.