Maruti Suzuki Q2 profit falls 39% amid auto slowdown
NEW DELHI/BENGALURU: Maruti Suzuki India reported a 39% slump in quarterly profit on Thursday, ahead of the crucial festive season, as the country’s biggest carmaker by market value struggled with a slowdown in Asia’s third-largest economy.
Unit sales at the carmaker dropped for the eighth straight month in September, with the industry also battling a credit squeeze, higher insurance costs and a shift towards ride-hailing services such as Ola and Uber Technologies Inc.
Maruti said on Thursday sales for the quarter ended September 30 dropped 30.2% to 338,317 vehicles from a year earlier, but forecast sales to be flat this month year-on-year.
“October should be okay for us in retail sales and wholesale ... but that does not mean we are out of the woods,” chairman RC Bhargava said at a press conference.
Sales this month are crucial for Indian businesses as a run-up to the festive season, which culminates on October 27 this year with Diwali.
Bhargava also said the company will put on hold for now plans to launch electric vehicles for individual use unless there is demand.
But the New Delhi-based company managed to beat market expectations for quarterly profit.
“There were no major incremental negative surprises,” said Basudeb Banerjee, an analyst at Mumbai-based Ambit Capital.
“This was one of the worst quarters and they survived this without giving any ultra shocker.”
The company reported a net profit of ₹1,359 crore for the September quarter, down sharply from ₹2,240 crore in the same period a year earlier.
Seventeen analysts, on average, had expected a profit of ₹1,076 crore, according to Refinitiv data.
Net profit for the first half of the fiscal ended September was at ₹2,767.9 crore as against ₹4,295.3 crore, down 35.55%.
Revenue from operations fell 24.3% to ₹16,985 crore in the quarter, the company—majority owned by Japan’s Suzuki Motor Corp.— said in a filing to the exchanges.
Revenue from operations in the first half stood at ₹34,862 crore as compared to ₹43,367.5 crore in the corresponding period last fiscal.
The maker of popular hatchbacks such as Swift and Baleno reduced production in August and September to cope with the slowdown and in August cut the number of its temporary workers.
Shares of the New Delhi-based company settled down over half a percent, compared with the broader Mumbai market which closed 0.19% down.
PTI contributed to this story.
THE COMPANY WILL PUT ON HOLD, FOR NOW, PLANS TO LAUNCH ELECTRIC VEHICLES FOR INDIVIDUAL USE UNLESS THERE IS DEMAND