Riding on strong domestic sales and export growth, Maruti Suzuki India on Thursday announced a 60.2 per cent jump in net profit in the quarter ended September 2016. The net profit for the company stood at a high of Rs 2,398 crore as against a net profit of Rs 1,497 in the corresponding period last year.
The total income from operations for the company too jumped by 29.3 per cent to Rs 20,296 crore during the July to September quarter, up from Rs 15,699 crore in the same period 2015-16.
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During the quarter, the company sold a total of 4,18,470 vehicles witnessing a growth of 18.4 per cent over the same period of the previous year. While sales in the domestic market stood at 3,83,030 units (YoY growth of 18.5 per cent), exports stood at 35,440 units up 17.9 per cent. The total sales in the second quarter is the best ever in a quarter and it was much higher than the previous best of 3,60,402 units witnessed in the fourth quarter of 2015-16.
Reiterating the strong performance, Maruti Suzuki India chairman RC Bhargava said that the July to September quarter has been the best the company has ever had on several accounts and that the capacity utilisation too stood high.
“The company is well on track and confident of achieving double-digit growth during the year,” Bhargava said, citing favourable market conditions and better production levels.
He pointed that if the second quarter production is annualised then the production would cross 1.7 million cars for the year. “This is way beyond 100 per cent capacity utilisation,” said Bhargava.
He also said that the company’s profitability was driven by high capacity utilisation due to robust sales. “When you have capacity utilisation like we have now, every extra car we make adds to profit because of reduced overheads, including depreciation.” During the quarter, domestic sales of Maruti Suzuki’s compact vehicles grew 8.6 percent in Q2 (YoY) to 1,46,265, while utility vehicle sales surged 150 per cent to 52,611.
The company said that while on the one hand the profit during the quarter has been the best ever, during the quarter, the company’s average discounts stood lower at Rs 16,100 as against Rs 19,500 in the same period last year. The firm said that even lower expenses on sales promotion and marketing and higher non-operating income also contributed to increase in profit. It however, added that this was partially offset by adverse foreign exchange movement during the quarter.
As a result of the strong performance in the second quarter, the company’s net sales for the six month period between April and September 2016 stood at Rs 32,280.6 crore witnessing a growth of 20.9 per cent over the same period last year. The net profit for the same period amounted to Rs 38,842 million, up 43.6 per cent. The Company sold a total of 766,913 vehicles in H1 a growth of 10.4 per cent.
Despite the strong result, shares of Maruti Suzuki fell marginally during the day by 0.2 per cent and closed at Rs 5,859 per share on Thursday. The company’s market capitalisation now stands at Rs 177,011 crore.