Even as Maruti Suzuki posted a 3 per cent decrease in net profits during the 2011-12 financial year, analysts declared that buyers should quickly buy its shares as its profits are expected to increase in coming time. The silver lining for the company were the results of the last quarter of the previous fiscal, when its net sales, net profit and volumes grew on Year over Year (YoY) basis. The good performance of the manufacturer during Q4 of FY 2011-12, which was the fiscal's first quarter when it operated without hindrances, raised the hopes of people looking to buy Maruti Suzuki stocks.
Talking about the prospects of Maruti Suzuki during the current financial year, Dipen Shah, Head, Fundamental Research, Kotak Securities, commented, “Maruti Suzuki’s 4QFY12 standalone numbers came in slightly lower than expected at the operational level. However net profit came in higher than anticipated on the back of sharp increase in other income. After going through a difficult patch in FY12, we expect the company’s performance to improve in FY13. We recommend accumulating the stock on dips.”
The overall results for the largest auto maker of India were also not positive as its net profit, domestic sales and exports for the fiscal also went down by 28.6, 11.2 and 7.9 per cent, respectively. Its market share reached a new low as it went below 40 per cent due to various problems that affected its sales last year. These included a labour strike at Manesar plant that halted production, depreciation of Indian Rupee in international market, earthquake in Japan, rising popularity of diesel vehicles at the expense of petrol cars and rising input costs. However, it is expected that the manufacturer will do better in coming time as it has set up a new diesel engine manufacturing plant, signed a deal with Ford for diesel engines and resolved the issue at the Manesar plant.
