Maruti beats estimates, net rises 3.4%

by Wade Massey October 30, 2017, 1:06
Maruti beats estimates, net rises 3.4%

Net sales rose 21.8% to Rs21,428.1 crore, largely because of a better product mix that helped increase what the company earned from every auto it sold.

Maruti Suzuki India hit new high of Rs 8,242, up 2% on the BSE in intra-day trade, after reported net profit of Rs 2,484 crore in Q2FY18, a growth of 3.4% over the same period previous year. In the July-September quarter, Maruti Suzuki sold 492,118 vehicles up by 17.6 percent (nearly 18 percent), more than it did in the second financial quarter past year. Its fiscal year-to-date market share stands at 50.5 per cent, against 47.4 per cent in FY17.

The company, majority-owned by Japan's Suzuki Motor Corp, reported net profit of Rs 2,402 crore in the corresponding quarter an year ago. Yields on investments were lower than the year-ago period, the cost of some commodities and advertising expenditure went up and effective tax rates were higher, it said. The net profit stood at ₹ 4040.7 crore, a hike by 3.8 per cent.

Sales of compact vehicles, which includes Swift and Baleno, rose 43.5 percent, while sales of utility vehicles like Ertiga and Vitara Brezza climbed 27.6 percent. Operating EBITDA (earnings before interest, tax, depreciation and amortization) margin however declined 10 bps to 17.2% in Q2FY18 from 17.3% in Q2FY17. The average discount per vehicle in the quarter was Rs 15,500, lower by Rs 1,000.

Sales of electric cars in India remain negligible, however, mainly due to the high cost of batteries which make the vehicles expensive and out of reach for many buyers in a country where cars are as cheap as 250,000 rupees ($3,800). "We intend to be leaders in the electric segment as well", he said.

Bhargava also talked about the future of the company and said that they are looking forward to launching electric cars in the country.

The shares of Maruti Suzuki were trading up at 1.56% or Rs 125.60, at Rs 8202.10 per piece at 13:54 hours on BSE.

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