Maruti shares take a 5% hit in opening trade
The country's largest carmaker Maruti Suzuki's shares tumbled by over five per cent to hit a 52 week low in early trade on the Bombay Stock Exchange (BSE) due to lower than expected third quarter results and weakness in the broader market.
Maruti Suzuki had posted a 17.80% decline in its net profit for the third quarter ended December 31, 2010, at Rs 565.17 crore due to a higher royalty payout, increased employee costs and higher discounts, which according to market observers disappointed the investors.
Shares of Maruti Suzuki tanked by 5.15% to touch an year low of Rs 1,170 a piece on the BSE. The company's shares witnessed a similar downside on the National Stock Exchange and slipped by 6.43% to quote at Rs 1,150.30 in the morning session.
"The company's third quarter numbers were below our expectations, as it reported net profit of Rs 565 crore, as against our estimate of Rs 601 crore, due to subdued performance at the operating front," equity broking firm Angel Broking said in a note.
Besides, the counter was also hammered by the weakness in the stock market benchmark Sensex, which was trading at 18,108.46, down 287.51 points from the previous close at 1032 hours.