Saturday, July 24, 2010

Maruti Suzuki reported decline in net profit in Q1 of FY 2010-11

For the first time in five quarters, India’s top car maker, Maruti Suzuki India Limited, posted a decline in its net profit. In FY 2009-10, the company sold record number of vehicles.

On July 24, 2010, Maruti Suzuki, published its financial result of Q1 of FY 2010-11 ending on June 30, 2010. Maruti Suzuki posted a 20.25 percent fall in net profit at Rs. 465.36 crore. It posted a net profit of Rs.583.54 crore at the same time last fiscal year.

The automaker blamed high price of commodities and increased royalty to Suzuki Motors for its decline in profit. In a statement issued by the company, it said, “The drop in net profit is due to higher commodity prices, increase in royalty and lower ‘other income’ In addition; income from exports to Europe fell due to weakening of the euro,”

The last time the company observed a decline in profit was in the fourth quarter of 2008-09, posting a profit of Rs.465.85 crore , a 6.5 percent decline on a year-over-year basis.

Total income from operation increased by 26.78 percent to Rs. 8,231.5 crore from Rs.6,493 crore at the same time last year.

During the quarter, Maruti Suzuki’s market share also declined to 47.59 percent which was more than 55 percent. In the last quarter, the company sold 2,06,3777 units in a total market of 4,33,641 units.

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