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.
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