Maruti scrip jumps 5.77% despite 63.6% fall in Q3 net profit

The Maruti Suzuki scrip soared 5.77 per cent in a flat overall market after the company announced a worse-than expected fall of 63.6 per cent in its third-quarter net profit as investors felt it could only get better

The Maruti Suzuki scrip soared 5.77 per cent in a flat overall market after the company announced a worse-than expected fall of 63.6 per cent in its third-quarter net profit as investors felt it could only get better from here.

Labour disputes,a spike in raw material prices and rising interest rates pulled down sales at Indias largest carmaker,which saw December quarter sales falling 17 per cent to Rs 7,663 crore from Rs 9,276.73 crore in the year-ago period. Net profit plunged to Rs 205.62 crore from Rs 565 crore in the previous corresponding period,making the latest quarter the worst in the last 12 quarters.

Maruti listed high interest rates,weak rupee,declining sales and labour unrest among reasons for its poor performance while sounding optimistic about the fourth-quarter numbers.

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Hectic buying in the last hour lifted Marutis share as it settled 5.77 per cent higher at Rs 1,162.55 on the BSE,after falling 2.64 per cent during the day. Maruti Suzuki chairman RC Bhargava and analysts attributed the surge to investors sighting the end of the tunnel for the company and expecting improvement ahead.

This is absolutely the bottom of the bad news, Bhargava said after results were declared,adding fourth-quarter earnings would be better. Analysts base their optimism on the assumption that interest rates have peaked and will not rise any further any rate cut would be positive. FE

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