Maruti Suzuki net jumps 170% in March quarter

Recommends dividend of 120 per cent per share .

Maruti Suzuki India, the country’s largest passenger car manufacturer, today reported a 170 per cent jump in net profit for the fourth quarter ended March 31, at Rs 656.6 crore compared with Rs 243.1 crore in the corresponding quarter of 2008-09.

This comes on the back of its highest-ever quarterly sales, at 287,422 units vis-à-vis 236,638 units in the January-March quarter of 2009.

“Though the profit in the quarter increased on the low base of last year, it was impacted to some extent by the cost of upgradation of the company's full range of cars to Bharat Stage-IV emission norms, cost of new model launches, higher raw material prices and adverse foreign exchange movement. Consequently, Maruti’s Ebitda (earnings before interest, taxes, depreciation and amortisation) margin for the fourth quarter went down 200 basis points to 13.5 per cent compared with 15.5 per cent in the third quarter of 2009-10,” said Ajay Seth, chief financial officer.

He said Maruti’s highest-ever profit had come in the third quarter of 2009-10, at Rs 687 crore. A 0.7 per cent rise in material cost and a lower exchange rate in the fourth quarter resulted in lower realisation.

Maruti’s total income for the fourth quarter also went up 30.9 per cent at Rs 8,424.55 crore against Rs 6,432.9 crore in the fourth quarter of 2008-09. For the financial year ended March 31, 2010, Maruti Suzuki India’s net profit surged 105 per cent at Rs 2,497.6 crore vis-à-vis 1,218.7 crore in 2008-09, while its total income grew by 42 per cent at 29,623 crore in 2009-10 compared with Rs 20,852.5 crore in 2008-09. Total sales went up by 28.5 per cent at 1,018,365 units vis-à-vis 792,167 units in the corresponding period.

The company’s board also recommended a dividend of 120 per cent per share on a face value of Rs 5 each for 2009-10.

The company says its growth will be lower in 2010-11, primarily due to the high base effect, but this would be in line with the overall industry. “It is projected that the total Indian passenger car industry will grow by a lower double-digit, in the range of 11-12 per cent, and we hope to register similar growth this year,” said S Nakanishi, managing director and CEO.

He said rural areas and middle class cities pushed the company’s sales last year, while this time even top cities are expected to respond well. “However, higher fuel prices, an expected increase in interest rates and depreciation of the euro will continue to put pressure on the company’s margins in the ongoing financial year,” he added.

Maruti has announced capital expenditure of Rs 2,800 crore in 2010-11 and an estimated Rs 3,000 crore for the next financial year, compared with Rs 1,300 crore in 2009-10.

Shares of Maruti Suzuki India fell by 1.97 per cent on the Bombay Stock Exchange, to close at Rs 1,335 after touching an intra-day high of Rs 1,386.05.