Mumbai: India’s largest car maker, Maruti Udyog Ltd on Tuesday reported a higher-than-expected 24% rise in quarterly net profit, helped by robust sales of its higher margin premium cars.
Maruti, 54.2% owned by Japan’s Suzuki Motor Corp, said net profit rose to Rs4.67 billion ($119 million) in the fiscal third quarter to end-December, from Rs3.76 billion in the same period a year earlier.
That beat a forecast of Rs4.47 billion in a Reuters poll of 10 analysts.
Maruti has nearly half the Indian car market with models such as the best-selling Alto and Swift hatchback, but is facing more competition from rivals including Hyundai Motor, Honda Motor, General Motors and Ford Motor.
Local rival Tata Motors, which reports later this week, has unveiled an ultra low-cost car, priced at just above $2,500, which is expected to shift motorbike users faster and take share from other car makers.
Maruti’s sales rose 17% to 201,629 units in the October-December quarter, but the company warned its large capex programme and depreciation will hit profit margins.
Volatile raw material costs and discounts to attract buyers put off by higher interest rates have also hit Indian automakers, and most other producers are expected to post lower profits when they report in coming days.
Shares of Maruti, which has a market value of $6.1 billion, fell 1% in the quarter, trailing a 6% gain for the sector index and a 17 percent climb for the benchmark index.