Maruti Suzuki India (MARUTI) Q4 04/05 earnings summary

Executive summary

• FY05 delivered record vehicle sales and higher profit despite rising input costs, oil prices and customer financing rates; productivity and cost controls supported margin expansion.

• Total vehicle sales reached 536,301 units; net-of-excise total income was Rs. 113,538 million, while profit after tax rose to Rs. 8,536 million.

Financial highlights

• Net sales, excluding excise, increased 20.1% to Rs. 109,108 million; total income, net of excise, rose 19.7% to Rs. 113,538 million.

• PBT rose 69.5% to Rs. 13,049 million; PAT increased 57.5% to Rs. 8,536 million, from Rs. 5,421 million.

• EBITDA was Rs. 18,140 million vs. Rs. 13,805 million; operating PBIT reached Rs. 9,495 million vs. Rs. 4,356 million.

• Vehicle sales contributed 94.5% of gross sales; spares, dies, moulds and components contributed 5.5%. Service income rose 85.6% to Rs. 516 million.

Outlook and guidance

• Near-term FY06 industry growth remained uncertain after a slowdown in Q1; VAT implementation and Bharat Stage III introductions may have contributed.

• Medium-term outlook remained positive, supported by low car penetration, economic growth, rural and infrastructure development, expanding finance and lower interest rates.

• Focus areas include entry-level and sedan growth, export-market development, Swift ramp-up, and leveraging the sales and service network.

• Manesar car and engine/transmission facilities were expected to begin commercial production by end-2006; new plant capacity planned initially at 100,000 cars annually, scalable to 250,000.