Powered by record sales during the financial year, India?s largest carmaker Maruti Suzuki posted a 170% rise in net profit during the fourth quarter, up to Rs 656.55 crore from Rs 243.13 crore in the previous corresponding period. Total income was up 30.96% at Rs 8,424.55 crore against last year?s Rs 6,432.90 crore. However, the results fell short of market expectations, with Maruti shares closing 1.97% lower at Rs 1,335 on the BSE, its highest decline since August 14, 2009.

Rising input costs, tough emission norms and volatile exchange rates have cast a shadow over automakers. Coupled with the prospects of higher interest rates, these could put pressure on the company?s margins.

The company recommended a dividend of 120% per share on face value of Rs 5 each for FY10, compared to 70% in the previous year.

?Though our net sales increased, our profit (in the fourth quarter) was somewhat impacted by higher raw material costs, new model launches and depreciation of euro and yen.?

The market continues to look good and we are optimistic,? MD&and CEO of Maruti Suzuki India Shinzo Nakanishi said.

For the full financial year, consolidated net profit was up 103.5% at Rs 2,497.6 crore against Rs 1,227.45 crore in the previous year. During the period, consolidated total income increased 42.27% to Rs 30,122.51 crore against Rs 21,172.20 crore in 2008-09.

Vaishali Jajoo, auto analyst with Angel broking, said the company?s results were below expectations due to higher input costs and advertising budgets. ?We were expecting Q4 net profit around Rs 705 core. It is slightly below expectations.?

The fiscal saw Maruti Suzuki joining an exclusive club of global automakers selling over 1 million cars in a financial year. In 2009-10, the company sold 10,18,365 cars, of which 1,47,575 were exported, the highest-ever for the company. Nakanishi said that during the year, the company had identified newer markets like South Africa , Hong Kong and Norway for exports.

With cut-throat competition in the small car market, analysts predict that Maruti?s margins could be under ?severe pressure? in the current fiscal as well. ?They have to advertise aggressively due to rising competition, which could put severe pressure on their bottomlines,? Jajoo said.

Mayank Pareek, executive officer for sales and marketing, identified the top 10 cities which would drive Maruti?s sales in 2010-11. ?Typically, the top 10 cities contribute around 40% of overall sales. This financial year, the share is definitely going to increase because we are seeing signs of a turnaround in this segment from October last year,? he said. Rural sales in the last fiscal doubled contributing 16.5%.

In a sign that the company is keen to maintain its market share, Maruti has also doubled its capital expenditure for the current fiscal to Rs 2,800 crore compared to Rs 1,300 crore in 2009-10. The money would gpo into new model launches, R&D and capacity hike at Manesar in Haryana.