Maruti Suzuki skids over 9% on bourses

The board approved implementing the expansion of manufacturing facility in Gujarat through Suzuki subsidiary.

Maruti Suzuki India (MSIL) has plunged 9% to Rs 1,545, falling nearly 12% from intra-day high on the BSE, after its board approved implementing the expansion of manufacturing facility in Gujarat through Suzuki subsidiary.

The land for the project would be leased by MSIL to the subsidiary company to establish the production and related facilities. The rent would be determined on an arm’s length basis, MSIL said in a statement.

MSIL had acquired approximately 640 acres of land in Becharaji and approximately 550 acres in Vithalapur in Mehsana district of Gujarat for further expansion of manufacturing facility, which was kept on hold due to market conditions, it added.

MSIL said, it would enter into a contact with this subsidiary company under which all production in the subsidiary company would be in accordance with the requirements of MSIL, and the vehicles would be sold to MSIL. The Suzuki subsidiary would not sell vehicles to anybody else.

Meanwhile, the company reported a net profit of of Rs 681 crore for the three months ended December 2013, as compared to Rs 501 crore in the same period last year, thereby recording a gain of 36%. Higher localisation, favourable forex and cost reduction initiatives pushed profit higher, the company said in a statement. The auto major's revenues came in at Rs 10,620 crore while net sales fell 3% y-o-y.

The stock opened at Rs 1,728 and touched a low of Rs 1,545 on the BSE. A combined 6.5 million shares changed hands on the counter till late noon deals on the BSE and NSE.