Maruti Suzuki Q1 Profit Falls 11% to Rs 3,352 Crore as Input Costs Surge

Maruti Suzuki has reported a significant decline in consolidated net profit for the June quarter, falling 11% year-on-year to ₹3,352 crore, compared to ₹3,758 crore during the same period last year. This performance contrasts with Bloomberg’s consensus estimates, which anticipated a profit of ₹3,440 crore. The company attributed this downturn primarily to inflated input costs stemming from geopolitical tensions in West Asia, which overshadowed a robust increase in sales performance across various segments.

Despite these challenges, Maruti Suzuki posted impressive revenue growth, with net sales increasing by 36% to ₹49,959 crore, up from ₹36,620 crore in the prior year. The surge in total expenses, which climbed 41% to ₹49,988 crore, highlighted the impact of rising material costs on overall profitability. Unit sales rose 29%, achieving a record of 682,724 cars during the first quarter, with domestic sales of small cars and SUVs both experiencing substantial increases of 34% and 45%, respectively. Notably, the company’s domestic market share improved by 2.3 percentage points, reaching 41.2%.

The commissioning of a new plant in Kharkhoda significantly contributed to the company’s enhanced sales capabilities, although the inventory level at the end of the quarter remained relatively low, at approximately 13 days. Furthermore, the board’s approval of four compressed bio gas (CBG) projects indicates a strategic move towards diversifying its energy portfolio, with a phase one budget allocation of ₹561 crore, although future expansion will depend on the outcome of these initiatives. Following the earnings announcement, Maruti’s shares experienced a slight uptick, closing at ₹14,239.40 per share on the BSE, reflecting cautious optimism among investors.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)