Maruti Q3 net up 41.8%

Maruti Udyog Ltd on Friday reported a healthy 41 per cent growth in net profit at Rs 339 crore for the quarter ended December 31, 2005, aided by higher operational efficiency, cost reduction measures and increased vehicle sales.

The company, in which Japan's Suzuki Motor Corp. Holds the majority stake, said total income (net of excise) was at Rs 3,220.7 crore, as compared to Rs 2,938.3 crore in the same period last year.

"Our financial performance has improved on the back of growth in sales, better operational efficiency, reduction in costs, lower depreciation and a favourable macro-economic environment," MUL Managing Director Jagdish Khattar told reporters.

Khattar said the company had embarked on a new cost- reduction programme called 'Next Leap'.

"This will be spread over a three-year period and entail improving productivity and quality while reducing costs across all the processes," he said, adding that the cost-cutting initiative had helped the company improve margins in the first nine months of this fiscal.

The company's operating margins in Q3 of this fiscal stood at 18.4 per cent, a per cent higher than 17.4 per cent in the same period last fiscal.

Sales for the company in the October-December 2005 period stood at 1.45 lakh units, a growth of 6.5 per cent. A decline in exports subdued the numbers as foreign shipments nearly halved to 7,883 units from 14,027 units in Q3 of last fiscal.

"The export decline is as per a plan and we are not very much concerned on this front," Khattar said.

MUL's profit in the nine months of the fiscal stood at Rs 828.1 crore, a growth of 39 per cent over Rs 594.1 crore in the same period last fiscal.

On the other hand, total income in the April-December 2005 period registered a 10.8 per cent growth at Rs 9,095.1 crore.

Khattar said sales for the company in the domestic market beat the industry growth rate as numbers moved up 8.2 per cent in the nine months of this fiscal at 3.8 lakh units (3.5 lakh).

"As a result, we have been able to increase our market share by 1.6 per cent to 56.2 per cent during the April- December 2005 period," he said.

He said the company's latest model 'Swift', available in the premium hatchback category, was doing well in the market, selling 40,000 units since launch.

In order to broadbase customer profile, the company is reaching out to new segments like government employees, teachers and public sector personnel.