23 Jan 2012;dailypioneer.com:New Delhi: Country’s biggest carmaker Maruti Suzuki India (MSI) on Monday announced a 63.6 per cent fall in its net profit at Rs 205.6 crore for December quarter as against net profit of Rs 565.17 crore for the corresponding period last fiscal. This is the worst performance by MSI in 12 quarters due to labour unrest and rupee depreciation. MSI’s net sales declined by 17.4 per cent to Rs 7,663.6 crore during the quarter under review from Rs 9,276.73 crore in the year-ago period. The rate of decline in profit is the sharpest since the third quarter of 2008-09 when the company had reported an around 55 per cent drop in its bottomline. “Unit sales in the quarter were impacted by sluggish market conditions caused by higher fuel prices and interest rates,” said a statement from the company. “MSIL results came in lower than expected at the operating and net profit level. 3QFY12 was an abnormal quarter as sales were hit due to strike at the company’s plant. While sales declined by 17.4 per cent YoY, strike at the company’s plant and adverse forex movement led to big drop of 63.6 per cent in YoY net profits,” said Kotak Securities Fundamental Research Head Dipen Shah while commenting on the MSI result. The company lost production of around 40,000 units due to the industrial relations problem at Manesar, it added. During the period under review, MSI sold a total of 2,39,528 units as against 3,30,687 in the year-ago period, a 27.56 per cent decline. Domestic sales stood at 2,11,803 units during the quarter under review, compared to 2,99,527 units in the same period last year. Exports stood at 27,725 units as against 31,160 units in same quarter last fiscal. On unfavourable currency movement, MSI Chief Financial Officer Ajay Seth told analysts in a conference call that the company suffered a total forex loss of Rs 200 crore in the third quarter on a year-on-year basis. Despite the poor results, the company’s shares closed 5.77 per cent higher at Rs 1,162.55 apiece on the BSE. “In the past few days, some positive news flow have led to appreciation of the stock price. Going ahead in FY13, volumes is expected to grow at a healthy rate, but adverse forex movement is expected to keep margins under pressure,” added Shah.
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