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Our Bureau

New Delhi, Jan. 29 Maruti Suzuki’s net profit for the third quarter ended December 2008 almost halved to Rs 213.5 crore (Rs 467 crore) marked by higher depreciation costs, volatility in the foreign exchange market and low sales volume.

The company, which makes more than half the cars sold in the country, posted a marginal decline in net sales at Rs 4,625.8 crore (Rs 4,674.1 crore) despite a 14 per cent drop in volumes at 1.73 lakh units.

This is mainly due to the consistent growth in sales from October to December of the sedans Dzire and SX4, while its entry-level model sales kept falling.

During the quarter, the impact on the net profit as a result of the new depreciation policy implemented by the company stood at Rs 90 crore.

The company has implemented a new depreciation policy since April 2008, which reduces the lifecycle of its tools and equipment to eight years instead of 13 years and four years instead of five for dyes.

“Higher provision for depreciation with the new policy lowered the profits during quarter by Rs 177.5 crore (Rs 86.7 crore). Losses on the account of foreign exchange have also risen to Rs 41.2 crore (Rs 1.5 crore),” Maruti Suzuki, Chief Financial Officer, Mr Ajay Seth, told Business Line.

More Stories on : Financial Performance | Cars | Maruti Udyog Ltd

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