MARUTI SUZUKI results update

The company recorded healthy growth of 21% to Rs 4753.58 crore in quarter endedJun ’08 backed by its net sales. Driven by 14% growth to 192584 units in its total salesvolume in quarter ended Jun ’08. Its domestic sales volume, that contributes 94% tototal sales volume, rose by 12% to 180093 units in line with the industry growth. Thedomestic sales volume was backed by its A2 segment (Alto, Wagon R. Zen, Swift) andA 3 segment (SX4, Swift Dzire). Its exports recorded healthy growth of 38% to 12491units in quarter ended Jun ’08. Also its income from operations rose by 31% to Rs22.55 crore.Its operating profit margin (OPM) slipped by notable 490 bps to 9.75% owing to thehigh raw material cost. Its market to market loss amounted to Rs 17.90 crore in quarterended Jun ’08.On the non operating front, its other income surged by robust 47% to Rs 328.78 crore.The other income includes interest/dividend income of Rs 222 crore (up by 41%) frominvestments in mutual funds and operational activities such as scrap sales of Rs 53.50crore (up by 55%). Its interest outgo rose by 12% to Rs 16.83 crore. Its depreciationcost surged by 102% to Rs 166.06 crore includes additional depreciation of Rs 61.90crore owing to the new depreciation policy. The company has adopted newdepreciation policy where in which the useful life of the assets under SLM method hasbeen shortened in quarter ended Mar ‘08. The company adopted this new depreciationpolicy on account of shorter product life cycles due to faster product refreshment andfast changing technology. However its tax provision slipped by 29% to Rs 143.68crore. Thus the downfall in its net profit was partially arrested to 7% to Rs 465.85crore