NEW DELHI -- India's biggest carmaker, Maruti Udyog Ltd., reported a 42.1 percent rise in quarterly net profit on Monday as robust economic growth and low interest rates boosted vehicle sales.
The New Delhi-based company has snared a 47 percent share of the market by selling mini cars for as little as 205,620 rupees ($4,441) and by tying up with State Bank of India and Citibank to offer attractive purchase schemes.
But sales growth could ebb in the current quarter after the federal budget this month imposed a 2 percent levy that makes vehicles more expensive.
Full-year sales, however, would still rise 15-18 percent on the back of robust GDP growth in Asia's fourth-largest economy, analysts say.
"The car segment will continue to do well even though there may be a temporary slowing owing to concerns about the monsoon," said Srivithya Rajesh, fund manager at Sundaram Asset Management.
Maruti, 54.2 percent owned by Japan's Suzuki Motor Corp., was the first Indian carmaker to report results. Tata Motors Ltd., also the top truckmaker, reports on Wednesday.
Maruti said net profit was 1.71 billion rupees ($36.9 million) in the first quarter to June 30, compared with 1.2 billion rupees a year ago. Net total revenue rose 24.1 percent to 26.16 billion rupees from 21.1 billion a year ago.
Vehicle sales at Maruti, which has a 47 percent share of the domestic market, rose 19 percent in April-June from a year ago, as industry sales boomed helped by a tax cut on cars over 16 months ago and attractive finance schemes.
Taxes and levies make up about 40 percent of the price of a car in India, where only eight of every 1,000 citizens owns one, compared with 35 in Thailand and 450 in the developed world.
Economic growth of 8.2 percent in the year to March and interest rates at three-decade lows contributed to industry growth of 22 percent in April-June.
But sales at Maruti, which mainly competes with the local unit of Hyundai Motor Co. and Tata Motors, rose a slower 18.9 percent from a year earlier, to 123,624 vehicles, as sales of bigger cars grew faster.
The maker of the mini Maruti 800 and compact Alto is one of 13 manufacturers of cars and utility vehicles in India, most of them units of global automakers like General Motors and Ford Motor Co.
Maruti's operating profit margin, a measure of efficiency, rose to 11.7 percent in the quarter from 10.1 percent in the preceding three months and 9.3 percent, a year ago.