Maruti Suzuki Quarterly Profit Surges on Minivan Demand, Yen

Maruti Suzuki India Ltd. (MSIL), the nation’s biggest carmaker by volume, reported profit that almost doubled because of a weaker Japanese yen and higher demand for its Ertiga minivans and revamped Swift DZire. The shares rose.

Net income at Suzuki Motor Corp. (7269)’s Indian unit rose to 12.4 billion rupees ($228 million) in the three months ended March from 6.4 billion rupees, the New Delhi-based company said in a statement today. The earnings include the results of unit Suzuki Powertrain India Ltd. which was absorbed in the fiscal year, Maruti said.

The carmaker has benefited from the yen’s decline which makes auto components it imports from Japan cheaper. Maruti has seen demand for its more expensive models soar even as its total deliveries dropped 4.6 percent in the quarter to 343,709 vehicles.

“Maruti’s margins should rise with the increasing share of more expensive products like Swift and DZire, as well as the declining yen,” said Basudeb Banerjee, an analyst at Quant Broking Pvt. in Mumbai. “Volumes may not breakout but with the declining yen and better product mix, the margins should get better.”

Shares Rise

Shares of Maruti rose as much as 5.2 percent, headed for their highest price since September 2009. They traded at 1,665.50 rupees, or up 4.7 percent, as of 1:25 p.m. in Mumbai.

Excluding the profit from Suzuki Powertrain, Maruti posted a net income of 11.5 billion rupees. That exceeded the 7.05 billion-rupee median of 40 analysts’ estimates compiled by Bloomberg.

Raw material costs declined 7.3 percent to 82.3 billion rupees in the quarter, the company said. Revenue other than from operations rose 34 percent to 3.9 billion rupees.

Maruti’s domestic deliveries in the year ended March 31 gained 4.4 percent to 1.05 million units while industrywide car sales declined 6.7 percent, the first time in a decade, as slowing economic growth and high interest rates kept buyers from showrooms.

Sales rose to 130.6 billion rupees in the quarter from 114.9 billion rupees, Maruti said.

The yen declined 9.1 percent in the quarter versus the rupee, according to data compiled by Bloomberg. The dollar fell 1.3 percent against the rupee, while the euro dropped 4.1 percent in the period, the data shows.

To contact the reporter on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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