Maruti Udyog net up 32.5%

Fall in depreciation pushes profits to Rs 226 cr.

Maruti Udyog Ltd has reported a net profit of Rs 226.46 crore for the first quarter of this financial year, a growth of 32.5 per cent over the same period last year.

Income (net of excise) was Rs 2,725.37 crore during April-June 2005, a growth of 6.1 per cent compared with the same period last year.

The company's net profit grew at a faster clip largely due to a 34 per cent fall in depreciation to Rs 78.29 crore from Rs 119.31 crore for the same period last year.

Ramnath Subramaniam, an analyst with Mumbai-based brokerage house SSKI, said, due to the fast changing designs in the Indian automobile sector, older jigs and moulds had to be depreciated at an accelerated rate in the previous quarter and the company was back to charging normal depreciation from this year.

"Overall, the performance seems impressive, except for the fact that spare parts and accessories from parent company Suzuki are not available at a discount with effect from June 30, 2005. Though it is difficult to estimate the financial impact, it may not be more than half per cent on the margins," he said.

Finished stock at the end of the first quarter shot up to Rs 95.34 crore from Rs 6.63 crore at the end of the first quarter of 2004-05. Analysts said the stock position at the end of any one quarter did not indicate much and the position had to be evaluated at the end of the financial year.

Interest cost during the quarter remained same at Rs 9.12 crore for the quarter.

Total sales in volume terms dipped in the first quarter by 1.42 per cent to 121,866 units from 123,624 units in the first quarter of 2004-05. During the quarter, Maruti sold 114,972 vehicles in the domestic market, a growth of 3.2 per cent over the same period last year. Exports during the quarter declined sharply by 44 per cent to 6,893 units during April-June 2005, compared to 12,240 units in the same period last year.

During the quarter under consideration, the company launched its 1.3 litre hatchback, Swift which currently retails in the price band of Rs 3.95 lakh to Rs 4.95 lakh in three variants.

The Swift was launched in the last week of May at an introductory price of Rs 3.85 lakh. Within a few weeks of its launch, the new model managed to gain a order backlog (wait listed) of around 10,000 units.

Though export of this model is not planned, the company currently produces close to 5,000 units of the Swift at its Gurgaon facility. The success of the Swift has also prompted the company to consider a Sedan version of the car, the introduction of which is yet to be announced officially.