Maruti profit rises to Rs.549 crore

Maruti Suzuki India Ltd. (MSIL) on Tuesday reported 18 per cent increase in its net profit at Rs.549.23 crore for the first quarter ended June 30, 2011, while its income from operations stood at Rs.8,529.30 crore, an increase of 2.65 per cent. The company also said it would invest about Rs.3,000 crore in 2012-13 to expand capacity and introduce new models.

Total sales declined marginally to 2.81-lakh units in the period under review from 2.83-lakh units in the same period in 2009-10. It sold 2.50-lakh units in the domestic market, while its exports were down by 24 per cent at 30,843 units.

“External environment was challenging from both volume and margin perspective...petrol prices were unprecedented and interest rate hikes hurt customer confidence,” said MSIL Chief Financial Officer Ajay Seth. Higher commodity prices and foreign exchange volatility also put greater pressure on margins compared to the corresponding period of the previous fiscal, he added.

Pointing out that the car market was sluggish, mainly due to a sharp increase in fuel prices and higher interest rates, while export volumes declined on account of lower demand from Europe. The 13-day-long strike by workers at the Manesar (Haryana) plant had also impacted the overall performance.

In the current financial year, MSIL will put in about Rs.4,000 crore in various activities. It is setting up two new plants inside Manesar with 2.5-lakh unit annual capacity each at an investment of Rs.3,625 crore. While one plant will become operational later this year, the second one will start producing cars in the next fiscal.