India’s largest carmaker Maruti Suzuki has reported a 27% increase in net profit for the first quarter of the current fiscal year (2018-19). The company’s net profit for the first (April to June) quarter stood at Rs.1,975.3 crore as against Rs.1,556.4 crore in the corresponding period a year ago. While the profit has increased substantially, it missed the estimates put forth by analysts.
Analysts estimated a net profit of Rs.2,268.5 crore on net sales of Rs.22,466.5 crore. In a filing released by Maruti Suzuki, the company noted that the first quarter results are not comparable to previous year’s results because of the impact of the Goods and Services Tax (GST) introduced in July 2017.
In terms of the number of vehicles sold, the company witnessed a 25.9% growth compared to the previous year due to robust demand in many of its models. The number of units sold during the first quarter stood at 463,840. Some of the top models that contributed to these sales figures include the new Swift, the new Dzire, the Baleno hatchback, and the Vitara Brezza.
Net sales for the first quarter increased 27.3% to Rs.21,810 crore from Rs.19,364 crore for the same period of last year. Operating profit for the same period increased 59.7% to Rs.2,631.3 crore. Various factors like higher sales volume, cost reduction efforts, and favourable product mix contributed to the company’s higher operating profit.
Maruti Suzuki contributes a significant part of Suzuki’s revenues, and it has a market value of more than $43 billion. The company has also entered into an agreement with Toyota Motor Corp. for manufacturing vehicles in the Indian market. Under the agreement, Suzuki and Toyota will supply vehicles to each other for the Indian market.
Shares of Maruti Suzuki fell on Thursday’s trading on account of the company missing the net profit and net sales estimates for the first quarter.
Source: Financial Express