The Hindu Business Line : Maruti net jumps 24% in Q4

New Delhi April 24 On the back of increased sales from its newly introduced Zen Estilo and Swift diesel, Maruti Udyog Ltd (MUL) on Tuesday reported a 24.3 per cent jump in net profit for the fourth quarter ended (January-March) March 31, 2007 at Rs 448.6 crore against Rs 360.9 crore in the corresponding quarter the previous fiscal (January-March 2006).

The total income went up by 36.6 per cent to Rs 4,634.7 crore during the quarter against Rs 3,392.3 crore in the same period of the previous year. The company's shares on Tuesday closed at Rs 794.40 after opening at Rs 760 at the BSE. The scrip had dipped to Rs 757 during the day. MUL's board has also recommended a dividend of 90 per cent for the financial year 2006-07.

For the fiscal 2006-07, the net profit stood at Rs 1,562 crore, up 31.4 per cent over the same period last fiscal. Total income for the fiscal under review stood at Rs 15,252.3 crore (net of excise), a growth of 22.2 per cent over the previous financial year.

Speaking to analysts after the board meeting, Mr Jagdish Khattar, Managing Director, said, "Sales has been propelled by compact cars." The country's rapidly expanding economy has created a more affluent middle class that has spurred demand for cars.

`Highest annual sales'

During 2006-07, Maruti sold 6,74,924 units, including exports of 39,295 units. "This was the highest-ever annual sales for the company. It represented a growth of 20.1 per cent over the previous year," the company said. Besides launching WagonR Duo and the Zen Estilo during the fiscal, the company entered the diesel segment with Swift Diesel.

Addressing newspersons later, Mr Khattar said the company would be unveiling two models in the current financial — SX4 and Grand Vitara.

However, there was concern over hardening of interest rates and other macro policy initiatives impacting the company's performance.

Justifying the reduced interest rate offers being given by the company, he said, "Interest rates are not in our control. It is our duty to bring customers to the market. We have to bear the cost of low interest rate offers, a large part of it."

When asked on the strategies being worked outto cushion the impact of increasing commodity costs (raw materials) on margins, Mr Khattar said there were three options available to improve productivity and cut costs, or reduce marketing costs, or improve per-unit realisation by passing costs. "Our single model Alto sold more units in 2006-07 in the domestic market than the combined sales of all models of our nearest rival," Mr Khattar stated. For the current fiscal, the company is looking at a capital expenditure of Rs 2,000 crore, compared with Rs 1,316 crore last fiscal.

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