Monday July 21, 05:08 PM
Maruti Suzuki Q1 falls 7 pct, beats f'cast |
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MUMBAI (Reuters) - Maruti Suzuki India Ltd, the country's top car maker, reported a 7 percent fall in quarterly net profit on Monday as high costs of raw materials and a new depreciation policy outweighed a rise in sales.
Maruti, 54.2 percent owned by Japan's Suzuki Motor Corp, said net profit fell to 4.66 billion rupees ($109 million) in the fiscal first quarter to end-June, from 4.99 billion rupees in the same period a year earlier.
That beat a Reuters poll forecast of 4.55 billion rupees.
Maruti, which recently adopted shorter depreciation cycles for its equipment and tooling assets, has nearly half the Indian car market, with models such as the best-selling Alto and Swift hatchbacks. Its sales rose 13.5 percent in the June quarter.
But the rising cost of inputs have hit margins, while high interest rates and a fuel price hike have dented demand.
It is also facing greater competition from rivals such as Hyundai Motor and General Motors.
Local rival Tata Motors plans to launch the Nano, a car priced at just above $2,500, later this year, which is expected to take a significant share of the small car market.
Shares in Maruti, which has a market value of about $4 billion, fell 26 percent in the quarter, compared to a 21 percent fall in the auto index and a 14 percent decline of the key index.
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