Weighed down by higher input cost, which rose by 17% on year, the country’s largest passenger vehicle manufacturer, Maruti Suzuki, on Wednesday posted lower profits than expected during the October-December quarter. The company’s standalone net profit at Rs 3,525 crore, was up 12.6% year-on-year, but below Bloomberg consensus estimate of Rs 3,604 crore.
Revenues from operations rose 15.6%, to Rs 38,492 crore, slightly surpassing estimates of Rs 38,436 crore. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) was up 14.4% at Rs 4,470 crore, but below estimates of Rs 4,497 crore. Margin contracted to 11.6% from 11.7% in the same quarter last year.
Total expense rose 15.5% to Rs 34,875 crore. Sales promotion expenses were higher over the second quarter due to new launches, executive director of corporate affairs, Rahul Bharti said in a post earnings call.
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Maruti sold a total of 566,213 vehicles during the quarter, which was up 13% compared to the same period last year. Of these, 466,993 units were sold in the domestic market, up 8.74%.
Exports at 99,220 units was up 38% and its highest-ever quarterly export numbers.
The company continues to lead in the CNG car segment, with one in every three vehicles sold being a CNG-powered model.
To maintain its dominance in the domestic market, the company is focusing on its newly launched first electric car, the e-Vitara, and its upcoming EV ecosystem to drive future demand.
“We have introduced the ‘e For Me’ initiative to promote EV adoption, offering eco-friendly solutions for customers. Production will begin soon, and our goal is to become India’s largest EV manufacturer within the first year of production,” Bharti said.
Regarding potential price hikes for the next financial year, Bharti stated that the company would absorb as many expenses as possible but would pass on costs to customers if necessary. The company plans to implement price increases ranging from Rs 1,500 to Rs 32,500 in February.
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