Maruti Suzuki India Q1 net profit rises nearly 27%, misses estimates

Mumbai :Maruti Suzuki, the country’s top car maker, has reported a lower than expected profit growth of 27 per cent owing to lower non-operating income, adverse commodity prices and forex rates in the April-June quarter of FY19.
Net profit for the quarter stood at Rs 19.75 billion. Net sales rose 27.3 per cent to Rs 218 billion for the quarter. Analysts were expecting an increase of 40-50 per cent in profit during the quarter.
During the quarter the company sold a total of 490,479 vehicles, growing 24.3 per cent over the same period of the previous year. Of these, sales in the domestic market stood at 463,840 units, up 25.9 per cent. Exports were at 26,639 units.
The stock price of the country’s most valued automobile firm reacted negatively to the results. The stock, which had opened in the green, was down almost four per cent to Rs 9,373 on the BSE, around 13.55pm.
The operating profit was Rs 26.31 billion, a growth of 59.7 per cent over the same period previous year on account of higher sales volume, favourable product mix and cost reduction efforts, the company said. However, this was partially offset by adverse commodity prices and forex rates.
While the operating profit increased by 59.7 per cent, the net profit increased by 26.9 per cent on account of lower non-operating income due to mark-to-market impact on the invested surplus, compared to last year, the company said.
The company has seen a 130 basis points increase in the material cost YoY. Material cost stood at 71 per cent of net sales in Q1 this year against 69.7 per cent last year. The company counts rising commodity price as one of the challenges going forward. Other factors to watch out are higher interest rates and rising fuel prices that could impact purchases.

(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)