Riding on record sales, Maruti Suzuki reports a four-fold increase in Q2 profit

Riding on record sales, the country’s largest passenger vehicles (PVs) manufacturer, Maruti Suzuki India (MSIL), on Friday reported a consolidated net profit of ₹ 2,112.5 crore in the second quarter that ended September 30, jumping four-fold compared with ₹487 crore in the corresponding period last year.

Consolidated total revenue from operations also jumped 46 per cent year-on-year (YoY) to ₹29,942.5 crore against ₹20,551 crore in the year-ago period, the company said.

MSIL said it sold a total of 5,17,395 vehicles during the quarter — its highest ever in any quarter. “Sales in the domestic market stood at 4,54,200 units. Exports were at 63,195 units. Shortage of electronic components impacted production by about 35,000 vehicles this quarter,” the company said.

During the same period last year, due to the acute shortage of electronic components, the company could sell a total of 3,79,541 units, of which 3,20,133 units were in the domestic market and 59,408 units were in export markets, MSIL said.

Festival sales boom

RC Bhargava, Chairman, MSIL, said challenges such as Covid-19 impact and shortage of electronic components which had seriously affected growth in the past petered out in the second quarter, thereby resulting in good growth.

“The festival season particularly has been excellent this year. People have, after a long time, come out of the Covid shock and gone out and done shopping like they have not done in the last three years. I think that has brought up the market as a whole,” he added.

MSIL said its pending customer orders stood at about 4.12 lakh units at the end of the second quarter, of which about 1.3 lakh vehicle pre-bookings are for recently launched models including Grand Vitara and the new Brezza.

The company said it has been making simultaneous efforts in securing electronic components, cost reduction and improving realisation from the market to better its margins adding that the better sales volume has relatively led to improved capacity utilisation.

According to analysts tracking the sector, the expectation is that the domestic PV industry would maintain high volume growth.

“We expect the domestic PV industry to record double digit volume growth in fiscal year 2023 and 2024, which would support MSIL’s business. Moreover, sales of premium products would further increase. MSIL would enjoy the benefit of higher market shares in CNG variants, as preference for CNG vehicles has been rising,” Mitul Shah, Head of Research at Reliance Securities, said.

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