New Delhi: India’s biggest carmaker Maruti Suzuki on Friday reported quarterly profit more than doubled from a year ago, marking the firm’s first earnings increase in 18 months as sales surged.
The profit jump marked a sharp recovery by the company - 54.2 per cent owned by Japan’s Suzuki Motor - from deadly labour unrest last year and a string of work stoppages that badly hit output.
Maruti reported profit for the October-December quarter climbed by 144 per cent to Rs5.01 billion (Dh346.7 milllion, $93 million), up from Rs2.05 billion in the same year-earlier period on sales that leapt 46 per cent to Rs109.6 billion.
“The growth in net profit was primarily due to higher sales and good response to new models,” the New Delhi-based company said in a statement, adding that a tight cost control drive had also helped to fuel profit.
Maruti, the biggest overseas unit of Suzuki Motor, is vital to the fortunes of its Japanese parent, contributing over half of its net profit, according to the Indian company.
Sales were lifted by a new, more fuel-economic version of its top-selling Alto hatchback and its Ertiga minivans, which Maruti launched last April — breaking into one of India’s fastest-growing segments.
Maruti’s domestic vehicle sales rose 27 per cent to 268,957 units in the third financial quarter from a year earlier while export sales climbed 17 per cent to 32,496 units during the quarter, the statement said.
The earnings numbers drove Maruti’s shares up by 4.15 per cent to Rs1,620 — far outpacing the broader stock market which rose by around one per cent.
The company’s performance stands out from rivals, whose sales have weakened in the face of consumer reluctance to commit to big-ticket items due to a sharp economic slowdown, costly auto loans and high fuel costs.
The Society of Indian Automobile Manufacturers forecasts domestic car sales growth will be flat for this financial year but says India remains a big market longer-term with just 11 people per 1,000 owning cars - compared with over 500 per 1,000 in the United States.