India's largest carmaker, Maruti Udyog Ltd, a unit of Japan's Suzuki Motor Corp, reported on Wednesday 2002-03 net profit jumped 40.1 per cent from a year ago, helped by productivity gains and cost cutting.
The automaker, held 54.2 per cent by its Japanese parent and poised for a public issue later this year, said in a statement it posted a net profit of Rs 146.4 crore (Rs 1.464 billion) in the past year to March compared to Rs 104.5 crore (Rs 1.045 billion) in 2001-02.
Total revenues of the company, in which the Indian government holds a 45.54 stake, rose 0.3 per cent to Rs 9,426 crore (Rs 94.26 billion) from Rs 9,398.9 crore (Rs 93.989 billion) a year earlier. Profit before tax jumped 138.4 per cent to Rs 282.1 crore (Rs 2.821 billion) from Rs 118.3 crore (Rs 1.183 billion) in the previous year.
It said net profit growth was driven by measures to enhance productivity and reduce costs across the company.
"Maruti engineers worked with component suppliers, leading to a reduction in the cost of components and further improvements in quality," it said. "The localisation levels for components also went up and helped in reducing costs."
Maruti, which has a dominating 50.8 per cent share of the domestic car market with its small, low-priced cars, said it sold 362,426 vehicles in the past year to March, up 2.9 per cent from the 352,197 units it sold in the previous year.
But the carmaker has faced increasing competition in the past four years from the Indian units of Hyundai, Fiat, Ford and local firm, Tata Engineering and had to cut the price of its largest selling model last year to win back market share.
The government plans to offload 25 per cent of the carmaker's stake to institutional investors and the domestic public, probably in June, as a part of its divestment drive.