Maruti Suzuki India Ltd. (MSIL), the nation’s biggest carmaker by volume, reported second-quarter profit that beat analyst estimates after a weaker Japanese yen cut import costs.
Net income at Suzuki Motor Corp. (7269)’s Indian unit almost tripled to 6.7 billion rupees ($109 million) in the three months ended September, the New Delhi-based company said in a statement yesterday. That exceeded the 5.48 billion-rupee median of 43 analysts’ estimates compiled by Bloomberg.
The carmaker benefited as the rupee gained more than 5 percent against the Japanese yen in the 12 months ended September, making components imported from Japan cheaper. Maruti’s local deliveries gained 15 percent in the quarter to 241,562 units, as a deadly riot in the year-earlier period led to a drop in output.
“Maruti has benefited from the exchange rate,” said Mahantesh Sabarad, an analyst with Fortune Financial Services Ltd. in Mumbai. “Going forward, the second half of the year will be challenging as volume growth will be tepid, the discounts are rising and the exchange rates are also becoming unfavorable.”
Average discount in the quarter was 17,500 rupees, according to Mayank Pareek, the company’s sales chief. That compared with 13,426 rupees in the preceding three-month period.
Shares of Maruti rose 0.3 percent to 1,513.35 rupees yesterday in Mumbai before the announcement. The stock has gained 1.6 percent this year, compared with a 5.9 percent advance in the S&P BSE Sensex Index.
Net sales rose 27 percent to 102.1 billion rupees, lagging behind the 103.3 billion-rupee median of 44 analysts’ estimates compiled by Bloomberg. The earnings include the results of unit Suzuki Powertrain India Ltd., which was absorbed in the year ended March 31.
Maruti exported 34,024 cars in the quarter, an increase of 67 percent, it said in the statement. The carmaker also said it gained from foreign exchange rates in the period.
Last month, India’s automakers’ body forecast the first annual drop in passenger vehicle sales since 2002 as an economic slowdown damps demand for cars and SUVs. The group had in April forecast a 5 percent to 7 percent increase.
“The economic scenario continues to be uncertain and we’ll have to rely on our own efforts to enhance sales,” Chief Executive Officer Kenichi Ayukawa said at a press conference in New Delhi yesterday. “In the long term we are confident of the growth potential of India, but are not in a position to predict sales in the short term.”
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