Maruti Q1 net profit doubles on robust sales

Maruti Suzuki on Monday beat market expectations with a nearly two-and-a-half times increase in net profit, supported by better realisations and higher non-operating income, and registered its highest quarterly net sales on record.

Net profit at the country’s largest carmaker rose to ₹2,485.1 crore in the fiscal first quarter ended June 30 from ₹1,012.8 crore a year earlier. Net sales increased to ₹30,845.2 crore as against ₹25,286.3 crore, while the average selling price of vehicles rose to ₹5.33 lakh from ₹4.76 lakh a year earlier.

“This was on account of larger sales volume, improved realisation, cost-reduction efforts and higher non-operating income,” the company said in a statement, referring to its profit growth. Non-operating income, which came outside of its main business of manufacturing and selling vehicles, rose to ₹1,001.2 crore from ₹88.5 crore.

The number of cars sold increased on the back of demand for the company’s new launches in the fast-growing SUV segment. Maruti Suzuki launched nearly half a dozen models – the all-new Brezza, Grand Vitara, Fronx, Jimny and Invicto – in the last one year, which boosted the realisation per vehicle. Sales of entry-models like the Alto and S-Presso, once the bread-earners for Maruti Suzuki, continue to remain under pressure.

Expenses rose 19% on year to ₹30,137.9 crore in the fiscal first quarter. Maruti Suzuki sold 498,030 vehicles during the April-June period, higher by 6.4% compared with the same period the previous fiscal year. While sales in the domestic market rose 9.1% to 434,812 units, exports fell 9% to 63,218 units. Shortage of electronic components led to a production loss of 28,000 vehicles in the past quarter.

“The semiconductor shortage is abating and for the rest of the year we believe problems related to availability will not be of serious order,” chairman RC Bhargava said.

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