Maruti Profit Increases on Higher Car Demand in India (Update2)
Maruti Profit Increases on Higher Car Demand in India (Update2)
By Subramaniam Sharma
Jan. 29 (Bloomberg) — Maruti Suzuki India Ltd., maker of
half the cars sold in the country, reported third-quarter net
income gained 24 percent after it sold more Swift hatchbacks and
SX4 sedans.
Net income in the three months ended Dec. 31 rose to 4.67
billion rupees ($119 million), or 16.17 rupees a share, from
3.76 billion rupees, or 13.03 rupees, a year earlier, the Indian
unit of Suzuki Motor Corp. said in a statement today. Revenue
rose 27 percent to 48.45 billion rupees.
Maruti has introduced five new models in the past year to
fend off rising competition from Hyundai Motor Co. and Tata
Motors Ltd., which this year will begin selling a car priced as
low as $2,500. Suzuki is among automakers spending more than $6
billion to expand in India, where economic growth may help car
sales triple over the next eight years.
“India has a robust consumer demand for autos,;; said A.S.
Thiyaga Rajan, who manages $250 million as managing director of
Aquarius Investment Advisors in Singapore. “A stable economic
growth environment will definitely sustain this in the future.;;
Rajan spoke before the earnings were released.
New Delhi-based Maruti fell 0.6 percent to 857.2 rupees at
on the Bombay Stock Exchange today. The stock has gained every
year since listing in 2003. The benchmark Sensex index fell 0.3
percent after India;s central bank left key interest rates
unchanged in a country where most cars are bought on credit.
Auto Loans
“The shares may have declined on concern that some
customers may delay purchases of cars after the central bank
today left key interest rates unchanged,;; said Vaishali Jajoo,
an analyst at Angel Broking Ltd. in Mumbai.
The Reserve Bank of India today left key interest rates
unchanged near a six-year high. The bank held the repurchase
rate at 7.75 percent.
It;s the 18th consecutive gain in quarterly net income for
Maruti, set up 25 years ago by India;s government and Suzuki.
Suzuki, Japan;s second-largest minicar maker, owns 54 percent of
Maruti.
India is the world;s fastest-growing major economy
after China. Six consecutive years of gains in the benchmark
Bombay Stock Exchange Sensitive Index, or Sensex, is creating
wealth among investors in India, boosting car sales.
Car Demand
India;s car sales have doubled in the past five years and
may triple to 3 million units by 2015 led by demand for cheap
cars from first-time buyers, according to government estimates.
Maruti;s sales of Omni vans, Alto minicars and other
vehicles in India and overseas gained to 201,629 in the last
quarter compared with 172,181 a year earlier. Maruti outsold its
parent in their respective home markets for the first time
between April and September, making India Suzuki;s biggest
market.
Spending on raw materials, the company;s biggest expense,
increased 31.4 percent in the quarter to 32.06 billion rupees.
Revenue from businesses other than manufacturing rose 33.6
percent to 1.71 billion rupees, Maruti said in the release.
To contact the reporter on this story:
Subramaniam Sharma in New Delhi at
