Maruti reports 20.25% fall in Q1 net profit

In a clear indication that its long held market share of more than 50 percent has been endangered by the increasing competition in the volume-driven segment, Indian auto giant Maruti Suzuki has reported a fall of 20.25 per cent in its net profit at Rs 465.36 crore for the period of April-June 2010. The company had registered a net profit of Rs 583.54 crore during the same period last year. The drop in the net profit of the auto major has come after a continuous profit making spree of about 15 months. The last time when Maruti Suzuki posted a fall in its net-profit was last quarter of financial year 2008-09. At that time, the company's net profit fell by more than 6.5 percent as compared to the same period preceding year. Maruti blames rising commodity prices for the decline in its net profit during April-June 2010. The company has stated in a statement that the drop in net profit is due to higher commodity prices, increase in royalty and lower 'other income'. It added that income from exports to Europe fell due to weakening of the euro. In addition to the fall in the net profit, the market share of the company has also slipped below the crucial 50% mark to 47.59 per cent. The company sold 2,06,377 units of its cars during the period as compared to the total sales of the market of 4,33,641 units. However, the total income from the operations for the company jumped by as much as 26.78 per cent to Rs 8,231.53 crore as compared to Rs 6,493 crore in the same period last year.