Maruti Suzuki Q1 profit drops 11% to Rs 3,352 crore amid rising input costs

New Delhi: Maruti Suzuki Friday missed D-Street estimates to report an 11% year-on-year decline in consolidated net profit in the June quarter, with input costs inflated by West Asia hostilities outweighing a robust increase in sales at India's biggest carmaker.

Consolidated profit at Maruti fell to ₹3,352 crore, compared with ₹3,758 crore in the corresponding period of the last financial year. Bloomberg's consensus earnings estimates for the June quarter were ₹3,440 crore.

The company said input costs increased during the quarter due to the crisis in West Asia, denting profitability despite strong growth in sales.

Also Read: Zee shareholders approve Rs 3,143 crore promoter fund infusion, ESOP plan

"Material costs had started to increase in the quarter and were seriously aggravated during the war," Maruti Suzuki said in a statement.

Net sales in the period under review rose to ₹49,959 crore, climbing 36% from ₹36,620 crore recorded in the year-ago period.

Total expenses surged 41% to ₹49,988 crore. Unit sales climbed 29% in the first quarter to a record 682,724 cars over the same period of the previous year.

Four CBG Projects
Sales for the company climbed across categories. Domestic small cars sales expanded 34%, paced by demand for SUVs that sold 45% more. Exports, meanwhile, climbed 29%.

Domestic market share increased 2.3 percentage points to 41.2%.

"Higher sales were possible because the company commissioned its second plant in Kharkhoda," Maruti said.

Despite increased sales, the network inventory level at the end of the quarter was about 13 days.

The company's board also approved four compressed bio gas (CBG) projects in the first phase with a budget of ₹ 561 crore. The board would consider expansion of CBG manufacturing based on the experience of these projects, the company said.

Shares of Maruti Suzuki marginally climbed to ₹14,239.40 apiece on the BSE. The earnings were announced after trading ended in Mumbai.