Maruti revs up bottomline 63%

Car major Maruti Udyog today reported a scorching 63.19 per cent increase in net profit to Rs 369.57 crore for the June 2006 quarter against Rs 226.46 crore in the year-ago quarter, on the back of higher efficiency in the use of raw materials, surging volumes and increased other income.

Total income, net of excise, increased 20.01 per cent to Rs 3,268.77 crore from Rs 2,723.67 crore.

Market expectations had pegged the net profit in the region of Rs 300 crore. On Bombay Stock Exchange, the Maruti stock surged by 2.21 per cent (Rs 16.90) to Rs 781.25 even as the benchmark Sensex rose 1.17 per cent.

Maruti, in which Japan's Suzuki Motor Company owns 54.12 per cent equity, achieved a 19 per cent increase in volumes to 144,948 units "" compared with single digit growth last year "" and similar growth in net sales to Rs 3114.02 crore.

However its consumption of raw material, components, spare parts, dies, moulds, and stores increased only 11.2 per cent to Rs 2381.25 crore. As a result, the ratio of raw material to net sales fell to 75.8 from 78. Given Maruti's scale of operation, this is fairly sharp.

The company's net profit also received a boost from 45.8 per cent rise in other income to Rs 143.30 crore from Rs 98.24 crore.

This included Rs 31.61 crore of long-term capital gains on sale of mutual fund units. This figure was only Rs 1.62 crore for the corresponding quarter of last year.

Analysts said the company also benefited from conflicting exchange rate fluctuations. The yen fell against the rupee, making Maruti's components imports from Japan cheaper.

The dollar, on the other hand, rose against the rupee, resulting in higher earnings on Maruti's exports, which rose to 7,844 units from 6,893 units.

Former Ranbaxy Laboratories managing director D S Brar, now the promoter and chairman of GVK Biosciences, today joined Maruti as non-executive independent director.