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Informist, Wednesday, Jul 31, 2024

--Maruti Suzuki Apr-Jun net profit 36.50 bln rupees vs 24.85 bln
--Analysts saw Maruti Suzuki Apr-Jun net profit 32.51 bln rupees
--Maruti Suzuki Apr-Jun revenue 355.31 bln rupees vs 323.27 bln
--Maruti Suzuki Apr-Jun op EBIT up 68.7% on year at 37.71 bln rupees
--Apr-Jun EBIT margin up 390 bps on year at 11.1%
--Maruti Suzuki: Favourable commodity prices, FX movement aided Apr-Jun
--Maruti Suzuki: Cost reduction efforts aided Apr-Jun margin

--Maruti Suzuki: Discount offset marginal benefits of lower input cost
--Maruti Suzuki: Offered average discount of 21,700 rupees Apr-Jun
--Jimny largest exported model in Apr-Jun

By Darshan Nakhwa 

MUMBAI – Maruti Suzuki India Ltd's bottomline jumped 47% on year in the June quarter, as its margin expanded sharply on the back of higher volumes--with a favourable mix of utility vehicles--and higher average selling price. Other factors such as the automaker's cost reduction efforts, favourable commodity prices and foreign exchange rates also aided the growth in the metric.

India's largest passenger vehicle manufacturer earned a net profit of 36.50 bln rupees in Apr-Jun, compared to 24.85 bln rupees in the year-ago period. Analysts had projected the bottomline at 32.51 bln rupees for the quarter. Its operating earnings before interest and tax margin expanded by a massive 390 basis points on year to 11.1%, and the operating EBIT surged 68.7% on year to 37.71 bln rupees in Apr-Jun. 

In Apr-Jun, the company's total revenue from operations rose 10% on year to 355.31 bln rupees, surpassing analysts' estimate of 347.45 bln rupees. Its revenue from sales of products rose 9.8% on year to 338.75 bln rupees and other operating revenue rose 11.8% on year to 16.56 bln rupees. Factors such as 4.8% growth in vehicle despatches, with increased share of high-margin utility vehicles, exports and price hikes fuelled the company's revenue growth. 

Maruti Suzuki dispatched a total of 521,868 vehicles in the June quarter, up from 498,030 units in the year-ago period. Domestic volume grew 4% to 451,308 units, while exports rose 11.6% to 70,560 units. Strong momentum in utility vehicle sales helped the company offset the weakness in the mini and compact segment. The sport utility vehicle Jimny was the largest exported model for the automaker in Apr-Jun.

In Apr-Jun, the company's sales of utility vehicles in India rose just over 29% on year to 163,130 units. In comparison, it reported a nearly 13% decline in sales of mini, compact and mid-sized vehicles. Over the last two years, Maruti Suzuki has launched several utility vehicles--Grand Vitara, Fronx, Jimny--to make the most of the shift in consumer preference to sport utility vehicles from hatchbacks and sedans.

In domestic markets, the demand for passenger vehicles was muted to some extent, largely due to heatwaves and the General Elections, the company's management said in a post-earnings analyst call. Recognising this challenge, the automaker launched the new Swift and introduced the Dream Series to generate interest amongst potential buyers in the small car segment. The company also increased the supply of compressed natural gas vehicles and raised discounts during the quarter. The company offered an average discount of 21,700 rupees in the quarter.

In Apr-Jun, the company's total expenditure grew nearly 6% on year to 318.17 bln rupees on account of an increase in expenses related to materials consumed and purchase of stock-in-trade. Cost of materials consumed rose 15.7% on year to 121.24 bln rupees. The purchase of stock-in-trade--which was the biggest expense incurred by the company--increased 4.2% to 137.04 bln rupees. Similarly, other expenses rose nearly 6% to 46.49 bln rupees, and employee benefits expenses rose 6.6% on year to 15.57 bln rupees. The company's tax outgo for the June quarter was 10.39 bln rupees, up 47% from 7.05 bln rupees in the year-ago period. 

On a sequential basis, the automaker reported weak financial performance on account of a 10.6% decline in overall sales. The company's bottomline fell 5.9% from 38.78 bln rupees in Jan-Mar, and topline was down 7.7% from 366.97 bln rupees in the previous quarter. Similarly, its operating EBIT fell 4.7% from 39.56 bln rupees. However, operating margin expanded by 30 bps from 10.8% in Jan-Mar.

Today, shares of Maruti Suzuki ended 1.9% higher at 13,115.80 rupees on the National Stock Exchange. The company announced its financial results post market hours.  End

Edited by Tanima Banerjee

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