Maruti Suzuki India (MARUTI) Q4 00/01 earnings summary

Executive summary

• FY ended 31 Mar 2001 closed with a net loss of Rs. 2,694 million, versus profit of Rs. 3,301 million in FY2000; turnover fell to Rs. 89,287 million from Rs. 93,151 million.

• Performance reflected weaker domestic demand, strategic price cuts, higher costs from new models and emission upgrades, a weak rupee, and interest and depreciation on recent investments.

Financial highlights

• Total income was Rs. 92,533 million, down from Rs. 96,725 million; operating profit declined to Rs. 931 million from Rs. 6,645 million.

• Profit before tax was a loss of Rs. 2,692 million, against profit of Rs. 3,851 million; net loss was Rs. 2,694 million after Rs. 2 million tax provision.

• Sales comprised Rs. 83,596 million from vehicles and Rs. 5,691 million from spare parts, dies and moulds.

Outlook and guidance

• Competitive pressures were expected to intensify as customer expectations rose and rivals planned launches; priorities included cost and efficiency, product development, vendor quality and localisation.

• Eight brands and nearly 35 variants were positioned to build on early new-model traction; fresh capacity and cost-cutting efforts were expected to support gains if the market recovered.

• Planned R&D priorities included product upgrades, localisation, cost reduction through value analysis/value engineering, and stronger product evaluation capabilities.