Maruti Suzuki Q1 net down 23% as rupee fall takes toll
Hit by rupee depreciation and higher overall expenses, the country's largest carmaker Maruti Suzuki India on Saturday reported 22.84 per cent decline in its net profit to Rs 423.77 crore for the first quarter ended June 30.
The company had reported a net profit of Rs 549.23 crore in the same period last fiscal, Maruti Suzuki India (MSI) said in a statement.
Net sales during the period under review, however, increased by 27.53 per cent to Rs 10,529.24 crore from Rs 8,256.58 crore in the year-ago period, it added.
"Adverse currency movements, notably the yen-rupee exchange rate, impacted profits negatively," MSI said.
The company said its overall expenses during the quarter went up by 31.01 per cent to Rs 10,331.77 crore from Rs 7,886.16 crore in the same period last fiscal.
Expenses on materials consumed during the quarter surged to Rs 8,063.04 crore from Rs 6,408.33 crore in the same period last year, an increase of 25.82 per cent.
The company's expenditure on employees benefit went up by 32.85 per cent to Rs 238.26 crore from Rs 179.35 crore.
The other expenses of the company soared by 57.31 per cent to Rs 1,363.33 crore during the first quarter from Rs 866.63 crore in the year-ago period, MSI said.
In the first quarter this fiscal, the company said unit volume sales stood at 2,95,896 units as against 2,81,526 units in the same quarter last fiscal, up 5.10 per cent.
"The growth in net sales was on account of higher total volumes, favourable product mix and enhanced exports realisations," the company said.
Market demand continued to be skewed in favour of diesel cars while petrol cars suffered a sharp de-growth during the quarter, it added.
During the quarter under review, MSI said its domestic sales grew by 5.02 per cent to 2,63,264 units from 2,50,683 units in the same quarter last fiscal.
Export also saw an increase of 5.80 per cent to 32,632 units from 30,843 units in the year-ago period, MSI said.
Analysts pointed out that despite robust sales of its Swift compact car and DZire sedan, the falling numbers of Alto have impacted the margins badly.
"Alto is a old model now, so its plants and machineries are also old. The royalty for this model is very less. However, Swift and DZire being very new cars, the royalty is very high," IHS Automotive managing director (India) Deepesh Rathore told agencies.
He further said the company could not manage its foreign exchange properly and this impacted the profits negatively.
On July 18, the company's Manesar plant was hit by violence in which one senior executive was killed and 100 others injured. Following this, MSI had declared an indefinite lockout at the plant on July 21.
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