Car maker Maruti Suzuki India Ltd (MSIL) on Monday reported a 170 per cent jump in net profit for the quarter ended March 31, on the back of a 21 per cent rise in sales.
The results, however, fell short of industry estimates, as rising raw material prices, upgradation of cars to meet Bharat stage IV emission norms and adverse foreign exchange movement ate into the company's margins.
Maruti's net profit for the quarter stood at Rs 656.6 crore as against Rs 243.1 crore in January-March 2009. The total income for the company during the period was Rs 8,503.5 crore, up 30 per cent over the same period in 2009.
"Last year was a landmark year for the company as we achieved the milestone of producing and selling more than 10 lakh cars in a single year," said Shinzo Nakanishi, CEO and MD, MSIL.
"Though competition is intensifying, we are firmly positioned to leverage our advantage in making fuel efficient low maintenance cars and we believe these will continue to play a big role when a customer goes to buy a car."
Maruti's operating margin declined by 2 percentage points to 13.5 per cent during the quarter as against 15.5 per cent during the previous quarter (October-December 2009). It was a mere 7.1 per cent in Jan-March 2009.
"All indications are that the sales will continue to grow in 2010-11 but it will not be as high as last year," said Mayank Pareek, executive officer, MSIL.
"In the last five years the industry has grown at an average of 13.5 per cent and last year's growth came after a flat year."
For the full year 2009-10, the company's profit jumped 105 per cent to 2,497.6 crore while total income was up 40 per cent to Rs 30,119.7 crore. Sales rose 29 per cent to 10.18 lakh units.