* Q1 profit 6.32 bln rupees vs 4.24 bln rupees a year ago
* Helped by cost cuts, favourable exchange rates (Adds forward-looking comments, executive quotes)
July 25 (Reuters) - Maruti Suzuki India Ltd, India's biggest carmaker, is seeking to sell more cars overseas to offset slowing demand at home, where it expects sales volumes to grow between zero and 5 percent in the current financial year.
The company warned that it expects discounts on car prices to increase in the current quarter due to weak demand, especially as diesel-powered cars lose their popularity after the government allowed monthly increases in prices of the fuel.
Maruti is India's leader in the small car market and accounts for 40 percent of all passenger vehicles sold in the country. It faces increased competition as global automakers step up launches in a market that has endured falling sales for eight months in a row - down from double-digit growth just two years ago.
"Exports are high on our agenda particularly when the domestic markets are not growing," a Maruti executive said on a conference call with analysts, adding that the firm wants to expand in existing markets with more products.
However, Maruti expects export volumes to be flat for the current financial year. Exports accounted for 8 percent of total sales of 266,434 vehicles during the quarter.
Maruti, 56.2 percent owned by Japan's Suzuki Motor Corp , said net profit rose 49 percent to 6.32 billion rupees ($107 million) for the three months to June, helped by cost cuts, favourable exchange rates and the company's merger with its engine production unit.
Analysts on average had expected the company to report a net profit of 6.62 billion rupees for the period, according to Thomson Reuters I/B/E/S. (Reporting by Aradhana Aravindan in MUMBAI; Editing by Matt Driskill and Elaine Hardcastle)