INDIA: Maruti fiscal year profit down, last quarter up

Maruti Suzuki fiscal 2011/12 net profit fell 28.6% year on year to INR16.4m on sales down 3.2% to INR347,059m. Unit volume fell 10.8% to 1,133,695 cars.

Domestic sales were off 11.2% to 1,006,316 and exports fell 7.9% to 127,379.

"The company's bottom line was impacted by adverse currency movement and increased commodity prices," Maruti said in a statement.

"The overall slow-down in the car market, including the skew towards diesel cars, also affected performance."

Maruti was affected by intermittent strikes over recognition of a new union at Manesar between June and October which cost it production of almost 75,000 cars and a revenue loss of INR22,000m. It was also unable to react fast enough to the increased demand for diesel models prompted by government policy and pre-budget rumours the government would increase the tax on diesel cars which turned out to be wrong.

In contrast to the full year result, fourth quarter sales and net profit both rose 17.2% to INR114,964m and INR6,398 respectively, as unit volume rose 4.9% to 360,334.

"While adverse currency movements made a significant impact during the quarter, the company was able to largely offset it through localisation and internal cost control, "