India’s largest carmaker, Maruti Suzuki India Ltd, on Monday reported a steep 63.6% fall in net profit at Rs 205.6 crore for the quarter ended December 2011 against the same period in 2010.
Maruti suffered on account of several factors including labour unrest, a general slowdown in car sales and an escalation in the cost of imports due to a weak rupee.
“This is absolutely the bottom,” said RC Bhargava, chairman, MSIL. “We will only go up from here. The next quarter would be better.”
The company’s stock at the Bombay Stock Exchange mirrored that sentiment, gaining 5.77% to end Monday at Rs 1,162.6 despite the poor results.
Maruti’s net sales declined by 17.4% to R7,663.6 crore during the quarter against Rs 92,76.73 crore in the previous year. It suffered a production loss of around 40,000 units during the quarter due to labour unrest at its Manesar plant.
After accelerating over 30% in 2010-11, passenger car sales in India have hit a rough patch due to expensive loans and high petrol prices. The Society of Indian Auto Manufacturers (SIAM) expects that Indian automobile sales will grow a measly 2% at best in 2011-12.
Maruti has already said it expects a flat fiscal year. Its sales so far in the first three quarters is down 16.5% to 684,892 units. Domestic passenger car sales for the industry is down 2.28%.
“It is a challenging market, but we are hopeful that it will get better from January onwards,” said Mayank Pareek, managing executive officer (marketing and sales), MSIL.