Maruti Suzuki beat street expectations Saturday as
fourth quarter net profit fell lower-than-expected 3% from a year ago to Rs 640
crore, helped by a rebound in sales and a surge in other income.
Net sales for the three-month-period were up 17%
year-on-year to Rs 11,486.4 crore.
On a sequential basis, the company's net profit more than
trebled, while net sales were up 50% over Oct-Dec quarter.
Analysts on average had expected Maruti to report a fourth
quarter profit of Rs 530 crore on revenue of Rs 12,012 crore.
"While adverse currency movements made a significant
impact during the quarter, the company was able to largely offset it through
localization and internal cost control," the Delhi-based company said.
Other income, which more than doubled to Rs 296.85 crore,
also put brakes on the declining profits.
In the fourth quarter, Maruti's raw material costs rose 18%
year-on-year to Rs 8,874.10 crore.
Its EBITDA (earnings before interest, taxes, depreciation
and amortization) margin was down 270bps year-on-year, but up 200 bps
sequentially at 7.3%.
Sales of passenger cars for most of last fiscal were hit by
slow demand due to expensive loans and high petrol prices. That apart, a crippling
labour strike at Maruti Suzuki's Manesar plant partly in second and third
quarters also hurt production of its popular Swift premium hatchback.
Sales, however, rebound in Jan-March as customers rushed to
book their vehicles before the excise duty hike from April. Its new Swift and
compact DZire models have also clicked among customers. During the quarter, the
company sold 3,60,334 units, up 4.9% year-on-year.
For the full year (2011-12), Maruti Suzuki's total sales
volumes declined near 11% from a year ago to 11,33,695 units.
"We remain bullish on the long term prospects on the
passenger car segment. However, we see increasing risk of the growth being
shared by the new entrants with higher value added products," said Ronak
Sarda, auto analyst at MSFL.
Maruti Suzuki shares closed up 1.1% at Rs 1,397.45 on NSE on
Friday. The stock is up over 50% since Dec-end.
The current valuations already factor in revival in volumes
and margins, feels Sarda.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
