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Informist, Friday, Apr. 25, 2025

--Maruti Suzuki: Bharat Mobility-led advt costs 30 bps higher in Jan-Mar 

--CONTEXT: Comments by Maruti Suzuki mgmt in post-earnings analyst call 

--Maruti Suzuki: Hope steel cos don't use safeguard duty to hike prices 

--Maruti Suzuki: Policy on new emission norms could be out in 1-2 months 

By Anand JC

NEW DELHI – Maruti Suzuki India Ltd. Friday said it hopes the steel industry does not misuse the recently imposed safeguard duty on the key raw material to hike prices, which could put pressure on the company's margin. "We will be monitoring the situation and report to the government if necessary," its executives told analysts at a post-earnings conference call. 

The Indian government recently imposed a 12% safeguard duty on specific steel products for 200 days following a sharp increase in imports of steel, potentially harming domestic steel players. Any steel shipment imported below $675-$964 per tonne in the specified category would attract the safeguard duty.

"We are extremely thankful to the government, they have found a way of minimum import price in which they have taken care of both the steel industry and the user industry, primarily auto... As of now, since our imports are above that particular threshold, we are not affected directly," the company said.

Higher steel and other commodity prices impacted Maruti Suzuki's expenses negatively, contributing 20 basis points to its increase in Jan-Mar. However, certain overheads and depreciation-related expenses related to Kharkhoda plant got captured in the profit and loss statement for the reporting quarter, pulling down the expenses by around 30 bps, the company said.

Maruti started commercial production at the Kharkhoda plant in Haryana, which has an annual capacity of 250,000 units, in the March quarter. As this is a new plant, scaling up production may take a while, the company said.

In addition, advertisement expenses, mainly on account of the Bharat Mobility Global Expo and the Indian Premier League, contributed 30 bps to overall expenses. Other expenses for the March quarter increased 90 bps, largely on account of lumpiness and seasonality associated with expenses such as repairs and maintenance, corporate social responsibility, digitalisation initiatives, research and development, among other things, the company said.

Maruti Suzuki reported a net profit of INR 37.1 billion in the March quarter on revenues of INR 406.7 billion. Both net profit and revenue missed analysts' estimates as expenses swelled. Shares of the company closed 1.7% lower on the National Stock Exchange at INR 11,698.  The company announced the results during market hours.

Maruti Suzuki expects the third iteration of the Corporate Average Fuel Efficiency norms, aimed at curbing carbon dioxide emissions, to be finalised soon and released in the next 1-2 months.   End

Edited by Saji George Titus

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