Shares in India carmaker Maruti plunge on profit fall

MUMBAI, July 26, 2010 (AFP) - Shares in India's biggest carmaker Maruti Suzuki plunged more than 10 percent on Monday after it reported a surprise 20-percent fall in quarterly net profit over the weekend.



The shares of the New Delhi-based company, which is majority-owned by Japan's Suzuki Motor Corp, were down by nearly 11 percent, or 147.

75 rupees, at 1210.50 rupees on the Mumbai stock exchange in late morning trade.






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Maruti reported that its net profit during the fiscal first quarter had slid to 4.65 billion rupees (99 million dollars) from 5.

84 billion rupees a year earlier, despite a 27 percent leap in sales.

The fall was a shock for financial analysts who had forecast Maruti would report a profit of around seven billion rupees for the three months to June 30.

Analysts blamed bigger royalty payments to Maruti's parent Suzuki Motor Corp following a new agreement and forecast that the payouts would put pressure on the company's earnings in future quarters.

Maruti, which makes nearly one in two cars in India, paid 1.

9 billion rupees in royalties to Suzuki, the company said, without giving year-ago figures.

The fast-growing Indian car market has become increasingly importan