Unit volume sales during the period stood at 387,251 units, up 3.5 per cent over same period a year ago. Of this, exports stood at 30,748 units, it said.
By ET Bureau |
NEW DELHI: Maruti Suzuki on Wednesday posted a 47.5% increase in third-quarter net profit, fuelled by strong demand for higher-priced mid-segment models Baleno and Vitara Brezza that helped offset the impact of demonetisation. The nation’s top carmaker posted a net profit of Rs 1,744.50 crore for the quarter through December, compared with Rs 1,183 crore a year earlier.
That was in line with the average of estimates compiled by Bloomberg. Total income from operations rose 13% to Rs 19,173.1 crore from Rs 16,957.6 crore, the local unit of Japan’s Suzuki Motor said. Shift in demand towards more expensive, and higher margin, mid-segment models such as the premium hatchback Baleno, sedan Ciaz and sports utility vehicle Brezza helped Maruti offset the impact of demonetisation that hurt the sales of other automakers in the past quarter.
The demonetisation decision,announced on November 8, took 86% of the country’s currency notes out of circulation, creating a severe cash crunch that also led to lower footfalls at dealerships. Monthly automobile sales fell to a 16-year low in December.For Maruti, vehicle sales in the past quarter rose a modest 3.5% to 3,87,251units, including exports of 30,748 units.
“Increase in share of the company’s higher segment models, lower sales promotion and marketing expense, cost reduction efforts and higher non-operating income contributed to the increase in profit,” Maruti said in a statement.
These gains were, however, partially offset by higher commodity prices and adverse foreign exchange movement. An analyst at a Mumbai brokerage firm called the results “a good set of numbers”, given the “challenging” environment. “Because of demonetisation, discounts in Q3 were higher than in Q2. But their product mix has improved and margins have gone up by 40 basis points year-on-year,” the analystsaid, asking not to be named.
ADVERTISEMENT
In a recent report, Kotak Institutional Equities said it expected that about 50% of Maruti’s domestic sales would come from its higher-priced cars in the current fiscal year, compared with less than 30% three years ago. Other, or non-operating, income for Maruti rose nearly two-andhalf fold to Rs 591.9 crore. In a call with analysts, the company said average discount was lower at Rs 19,048 per vehicle, compared with Rs 21,997 in the year-earlier period.
For the nine months between April and December 2016, the company sold 1,154,164 vehicles, an increase of 8%. Out of these, exports totalled 92,291. Shares of Maruti Suzuki closed at Rs 5796.80, up 1% on the Bombay Stock Exchange on a day when the benchmark Sensex rose 1.2%.
