After reporting 3 percent decrease in year-on-year net profit at Rs. 640 crore at the end of March 2012, Maruti Suzuki (India) is trading at Rs. 1,365, lower by 2%. However, a net profit of Rs. 544 crore was expected by the analysts from Maruti Suzuki. On year-on-year basis, net sales of the company increased to Rs. 1,149 crore by 17%
By over 100 basis points each, the profit margin of the company declined. During the quarter, operating profit margin reduced to 10.03% from 11.48%. From 6.71%, net profit margins declined to 5.55%. In a filing to the stock exchanges, Maruti Suzuki, said, “The adverse currency movements made a significant impact during the quarter, the company was able to largely offset it through localization and internal cost control.”
For fiscal 2012, a final dividend of Rs. 7.50 per share has been recommended by the board of directors of the company on face value of Rs. 5 per share. In opening deals on both the exchanges, combined 35,000 shares have been traded.
Regarding the future of Maruti Suzuki shares, Sudip Bandyopadhyay, MD & CEO, Destimoney Securities, said, “I will like to buy Maruti Suzuki still. What's happening is that there is a huge potential growth which Maruti will get on the back of their new SUV launch. SUVs are about 15% of total four wheeler market and Maruti was not at all present in that segment. I think this fiscal they will garner reasonably good market share on SUV. Last years production loss which they had unlikely to recur this year, so overall I think Maruti will be back on track. There is a concern regarding the Forex hedging policy but as the company clarified about 50% of the exposure they will henceforth be hedged always. So that’s a very positive sign. We continue to remain bullish and I think out of the four wheeler companies Maruti will be out top pick.”
