Maruti Suzuki has reported 18 percent lower profit in the fourth quarter of this year. The company reported a net profit of Rs 243 Crore for the quarter ended March 31, 2009 against Rs 297.68 Crore in the same period previous year.
Chetan Vora, an analyst at Brics Securities Ltd. in Mumbai said, "Maruti incurred a foreign-exchange loss of 1.21 billion rupees in the quarter on wrong-way currency bets as the rupee fell to a record low against the dollar. Still, the company may be able to boost profit margins this year as the global recession cuts commodity prices and Suzuki boosts export of fuel-efficient hatchbacks from India".
Speaking to media persons, managing director of Maruti Suzuki Mr. Shinzo Nakanishi revealed that profitability was affected by the high community prices, high interest rates, and due to the slowdown in auto industry.
Mr. Nakanishi said that the company is expecting a tough market in new fiscal year and is prepared to meet the challenges with new launches and better production facilities in India.
The net sales revenues had increased by 30 percent to Rs 6,432 Crore against Rs 44,943 Crore compared to the same month last year. However, the company's profit margins have cut down by a half to 8.62 percent during the period.
Maruti Suzuki continues its commitment for Indian plans and has not altered its long term expenditure. It plans to invest Rs 9,000 Crore within four years. The company is getting ready to launch its new small car Ritz (known as Splash in other markets).
For 2009, company's net profit scaled down by 30 percent to 1,219 Crore from 1,731 Crore garnered in the fiscal 2007-08. However, net sales revenues from manufacturing operation have increased by 13 percent to Rs 20,852 Crore in 2009, while in 2008 the revenues were 18,375 Crore.
Auto industry analysts said that despite reported losses, Maruti Suzuki continues to be in a strong position compared to other car manufacturers in India.