Maruti Suzuki Ltd, India's biggest carmaker by sales volume, said its third quarter profit more than doubled, its first increase in 18 months after a torrid period marked by a strike, plant shutdowns and a demand slowdown.
The small car champion, which two years ago produced every other new car sold in India, outperformed a miserable market during the quarter to end-December, bouncing back after a deadly factory riot in July led to a $250 million production loss.
Maruti, controlled by Japan's Suzuki Motor Corp, said profit for the Oct-Dec quarter was 5.01 billion rupees, up from Rs. 2.05 billion in the same quarter of 2011. Sales rose 46% to Rs. 109.57 billion.
Analysts had expected profit of 5.24 billion rupees, according to Thomson Reuters I/B/E/S.
At 2:36pm, shares in the automaker were up 3.5% at Rs. 1,593, outperforming a Mumbai market that was up 0.80%.
Maruti sold 27% more cars in the quarter, helped in part by strong sales of a cheaper and more fuel-efficient version of its Alto, the world's best-selling small car, during India's October-November festival season when people typically make big purchases.
The growth in profit was primarily due to higher sales and a positive consumer response to new car models like utility vehicle Ertiga and Swift DZire low-cost sedan, Maruti said in a statement, adding that cost cuts also boosted profit.
Car sales in India so far this fiscal year are down on the previous twelve months and are on track to post their lowest growth in nine years, according to the Society of Indian Automakers (SIAM), an industry lobby group.
High interest rates, rising fuel prices and slowing economic growth is hurting India's car market, once the toast of the global industry, tempting a slew of carmakers to invest billions of dollars setting up plants.
Analysts expect Maruti to cut its capital expenditure by about 12% in the next 12 months, which would be the second biggest cut among 40 top Asian automobile firms, according to Thomson Reuters Starmine's SmartEstimates.
SmartEstimates accords greater weight to recent forecasts from historically more accurate analysts.