Maruti Suzuki Q1 net up 25 per cent

The company posted a net profit of Rs 583.54 crore for the quarter ended June 30, as against Rs 465.85 crore in the April-June period in 2008.

Net sales during the first quarter soared 34.01 per cent to Rs 6,340.26 crore from Rs 4,731.03 crore in the year-ago period.

"Diesel car sales, which have gone up significantly by 66 per cent over the same period last year, and export growth have given higher realisation," Maruti Suzuki India (MSI) Chief Financial Officer Ajay Seth told investors after declaring the results.

The company's exports in the first quarter grew by over two-fold to 29,314 units from 12,491 units in the year-ago period. Of the total sales, about 90 per cent accounted for A-Star.

MSI had sold 2,26,729 vehicles in Q1 compared with 1,92,584 in the same period last fiscal, up 17.73 per cent.

On the outlook for the entire fiscal, Seth said: "We are cautiously optimistic for the rest of the fiscal. Cautious because of a deficient monsoon, which could significantly affect sales in the rural areas, which was increasing."

Although there is no direct correlation between monsoon and rural sales, but it is mainly driven by a 'feel-good factor', and hence will definitely affect the sales, he added.

Contribution in its total sales through rural network increased to 12 per cent in the last quarter from 9 per cent in the year-ago period.

Seth said the company is also looking at the movement of the interest rates, which could go up due to higher government borrowings.

On its production capacity, Seth said the company is capable of rolling out up to 12 lakh units per annum by putting extra hours from an installed capacity of 10 lakh units in its two facilities in Gurgaon and Manesar.

The company currently has Rs 620 crore debt on its books with 4.5 per cent interest rate on long-term debt, Seth said, adding "re-payments have started now and will go on for the next five years".

Besides, to reduce its cost, the company is focusing on enhancing its localisation in components.

Seth said there was an impact of Rs 50 crore in the first quarter due to currency fluctuations on supplies from vendors.

He further said MSI would invest Rs 2,100 crore this fiscal in various activities, including new model launches, R&D and plant upgradation. It has already pumped in Rs 310 crore in the last quarter.

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