Maruti's net profit falls 5 percent, lags estimates.
New Delhi, Oct. 30 (ANI)
India's automobile major, Maruti Suzuki on Tuesday lagged estimates with a five percent fall in profit, its fifth consecutive quarterly decline.
Shares in Maruti, however, rose as much as 4.2 percent after the earnings as the sales volume in the quarter was better than expectations and traders expect a pickup in demand in the months ahead.
Maruti, controlled by Japan's Suzuki Motor Corp said net profit fell to 2.27 billion rupees in the second quarter of the fiscal year that began in April, from 2.40 billion rupees a year earlier.
Net sales rose 8.5 percent to 80.7 billion rupees, the company said in a statement, helped by improved sales of its newly launched Ertiga.
The company's Managing Director (MD) and Chief Executive Officer (CEO) Shinzo Nakanishi said in New Delhi that adverse macroeconomic situations had led to the reduction in profits.
"There was a background of challenging macroeconomic situation and weak market sentiment in the country, owing to huge distortion in the price of petrol and diesel," said Nakanishi.
"The company had an unfortunate incident of large scale labour violence at the Manesar plant in July, and was forced to lock out the plant for almost a month to ensure the safety of our employees," he added.
Maruti was forced to close its Manesar unit for more than a month after labour unrest erupted into a mob riot that left one manager dead and scores of other executives and staff members injured.
Nakanishi said that the company had resumed operations at this plant, and expected the operations to reach its full production capacity.
Earlier this month, the company made an aggressive move to boost sales of its largest selling 'Alto' model, with the revamped 'Alto 800' launched in the entry-level segment.
Sales of Maruti's entry-level models are down 21 percent so far in the current fiscal year, hit by greater competition from rivals including Hyundai Motor Company's Eon and Tata Motors Limited's Indian-made Nano.