Maruti Suzuki India Ltd on Thursday said that its profit for the January- March quarter has dipped by 34%, compared to the previous year. The company said that as it applied more strict depreciation rules, there is dip in profit. Previous year, the profit for the January- March quarter stood at Rs 448.60 crore where as this year it stands at Rs 297.70 crore. Meanwhile, the company has recorded an increase of 9.4 % in the total income during the quarter which stands at Rs 5069.90 crore.

 

Maruti said in a statement that it has adopted a shorter depreciation cycle for stronger financial reporting. Instead of 13 years, the full depreciation for equipments will now be 8 years. The dip in the profit in the fiscal fourth quarter of Maruti also saw a dip in its shares in the Bombay Stock Exchange. The shares fell by 3.25% and closed at Rs 745.95 in Thursday.

 

An analyst at the Religare Securities said, Maruti had adopted the new depreciation policy because it wanted to introduce new products quickly in shorter life cycle of its assets. The operating profit of the year stood at Rs 3130.8 crores, 21% higher than the previous year. The company has announced a dividend of 100% for the year 2007-08.