Maruti Q3 net jumps 221% to Rs 687 cr; to invest Rs 1,700 cr

The company also said it will invest Rs 1,700 crore to expand the production capacity at its Manesar plant by 2.5 lakh units annually by 2012.

MSI posted a net sales of Rs 7,333.77 crore for the December quarter, up 62.51 per cent from Rs 4,512.64 crore in the same period previous fiscal, while its vehicle sales were at 2,18,910 units, up 37.8 per cent from the same quarter a year ago.

"The percentage growth (221.9 per cent) in net profit is perhaps the highest ever, although it is aided by the low base effect of last year. The sales volume and turnover are also the highest that we have achieved in a quarter," MSI Chief Financial Officer Ajay Seth said.

The robust performance was aided by favourable conditions in the domestic market such as support by the government's stimulus package and ease of automobile finance, it said.

"Favourable exchange rate on exports to Europe, declining raw material costs and better product mix also contributed in our better bottomline," Seth said.
Exports during the quarter grew by over 167 per cent to 39,116 units compared to 14,634 units in year-ago period.

Seth said after investing Rs 1,700 crore to expand its capacity, MSI's total annual capacity will be 1.25 million by 2012.

Maruti Suzuki India currently has two plants at Gurgaon and Manesar in Haryana. While, the Gurgaon plant has capacity to produce seven lakh units annually, the Manesar unit has a yearly capacity of three lakhs.

It currently commands over 50 per cent of the market share in the Indian auto market that is closing in on two million units annually.
The capacity expansion is part of the company's plans to retain its pie as the Indian car market is estimated to touch three million units by 2015.

MSI Managing Director Shinzo Nakanishi had said during the Auto Expo earlier this month that by 2015 the company expects to have an output of 1.5 million units annually.
On the outlook for the remaining quarter of the fiscal and the year ahead, the company said it remains cautiously optimistic about sales volume in the current quarter.

"The margins would be under pressure due to introduction of BSIV technology in the large volume models and hardening of commodity prices. The focus on cost reduction and Kaizen in operations continues," it said.

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