Maruti profit up 41% to Rs 339 cr

Maruti Udyog Ltd, the country's leading car company, has reported a 41 per cent rise in net profit for the third quarter of the current financial year to Rs 339.01 crore, riding on higher profits per car, surging sales, and lower interest and depreciation.

The company had reported a net profit of Rs 239.66 crore for the same period last year. Net sales in the quarter grew 11 per cent to Rs 3104.31 crore from Rs 2796.46 crore.

In 2004-05, Maruti's net profit for the third quarter had risen 70 per cent, much faster than the net sales, which had increased by 26.75 per cent. In the third quarter this year, each car sold raked in a net profit of Rs 23,378.

Seven quarters ago, the net profit per car was just Rs 13,826.

'Our financial performance has improved on the back of growth in sales, better operational efficiency, reduction in costs, lower depreciation and a favourable macro-economic environment,' said Jagdish Khattar, managing director, Maruti Udyog.

Having brought down interest costs during the third quarter by 77 per cent, the company's management is not planning to increase the debt component to fund its expansion projects.

The Rs 6,000 crore being invested in a new car plant and a diesel engine facility will be funded from internal accruals.

Overall vehicle sales, in volume terms, during the third quarter grew 7 per cent to close the quarter with total sales at 145,010 units.

Strong growth in sales and net profit was partly due to the success of the company latest offering, Swift, which has sold 40,000 units in the eight months since being launched.

Between April and December 2005, Maruti's sales growth was 8.3 per cent, while the industry witnessed a growth of just 1.7 per cent. 'As a result, we have been able to increase our marketshare by 1.6 per cent to 56.2 per cent between April and December 2005,' Khattar said.

Earning before interest, depreciation and tax over net sales improved to 18.4 per cent in the recently concluded quarter, up from 17.4 per cent reported for the same period last year.

For the nine months ending December, net sales improved by 11 per cent to Rs 8743.09 crore and net profit jumped by 39 per cent to Rs 828.13 crore.On NSE, the Maruti stock rose sharply today to close at Rs 706.30, against yesterday's close of Rs 660.80.