Forex gains drive up Maruti Q1 net, up 49% at Rs 631.6 cr

The company had posted a net profit of Rs 423.77 crore in the corresponding period last fiscal

Driven by foreign exchange gain, the country's largest car-maker Maruti Suzuki India (MSI) today reported 49% jump in net profit at Rs 631.6 crore for the first quarter ended June 30, 2013.

The company had posted net profit of Rs 423.77 crore in the April-June quarter of last fiscal.

Sales were down 9.98% to 2,66,343 units, from 2,95,896 units in the year-ago period as the auto market continued to reel under demand slump.

In value terms, MSI said Q1 net sales were Rs 9,995.12 crore as against Rs 10,529.24 crore in the same period a year ago, down 5%.

'Favourable foreign exchange rates during the quarter helped improve export realisation and limit the impact on net sales,' the company said.

Besides, MSI said the increase in net profit was also due to focussed cost reduction efforts undertaken by it and the benefit from merger of Suzuki Powertrain India Ltd (SPIL) with the company in the 2012-13 fiscal.

Addressing analysts, MSI Chief Financial Officer Ajay Seth said: 'Rupee depreciation has helped in higher export realisations.'

The company however did not quantify the forex gains.

Stating that it was a challenging quarter as demand was low, Seth said the company had to increase efforts to woo customers.

'During the quarter, the average discount across the models was Rs 13,446 as against Rs 11,646 in the year ago period,' he added.

Seth said that going forward 'there will be significant increase in the discounts offered on cars. We should prepare for that. Discounts of diesels cars have gone up because diesel engine sales are declining and discount on diesel cars is impacting margins'.

MSI scrip ended the day at Rs 1,414.20, down 0.12% from the previous close on the BSE.