NEW DELHI: Owing to highest-ever sales in a single quarter and improvement in operating margins, India’s largest carmaker -- Maruti Suzuki (MSIL) -- on Friday reported a whopping 334% year-on-year (YoY) growth in its standalone net profit for the quarter-ended September FY23 (Q2FY23).
The carmaker’s operations were disrupted by high commodity prices and chip shortage in the same quarter last year. MSIL posted a net profit of Rs 2,061.5 crore during Q2, as against a net profit of Rs 475.3 crore in the corresponding quarter last fiscal. MSIL’s revenue from operations surged 46% YoY to Rs 29,931 crore while its operating profit margin improved sharply by 670 bps YoY to 7.2% during the quarter under review.
“Relatively better sales volume leading to improved capacity utilisation, favourable foreign exchange variation, cost reduction efforts, and improved realisation boosted margin performance, though impacted by higher advertisement cost, and higher power & fuel expenses,” the company said.
MSIL sold 517,395 vehicles during the quarter, the highest-ever in any quarter. Sales in the domestic market stood at 454,200 units. Exports were at 63,195 units. Shortage of electronic components impacted production by about 35,000 vehicles in this quarter. The same period previous year was marked by acute shortage of electronic components and consequently the company could sell 379,541 units comprising 320,133 units in domestic and 59,408 units in export markets.
Maruti claims it has pending orders of about 412,000 vehicles at the end of Q2, out of which about 130,000 vehicle pre-bookings are for recently launched models.Dalal Street welcomed MSIL earnings. Shares of the company rallied over 5% and hit a 52-week high of Rs 9,548 on the BSE.
The stock eventually settled at Rs 9,494.RC Bhargava, MSIL chairman said Indians are moving towards SUVs and MUVs from hatchbacks and that they are in the “phase of transition” to cater this shift. He estimates that demand for smaller cars is likely to decline in financial year 2024 even as the passenger vehicle market that is set to grow by 8%.
