Maruti Suzuki Q3 net rises 36% even as sales tumble

Higher localisation, favourable forex & cost-reduction initiatives boost earnings

Maruti Suzuki India (MSIL), the country’s largest car maker, reported a 36 per cent increase in net profit at Rs 681 crore for the third quarter ended December. The company had a net profit of Rs 501 crore in the corresponding period of the previous financial year.

Higher localisation, favourable foreign exchange and cost-reduction efforts helped lift the profit, said Ajay Sheth, chief financial officer.

Net sales in the quarter under review, however, declined three per cent to Rs 10,620 crore from Rs 10,957 crore a year earlier. The company gained Rs 130 crore as the yen weakened against the dollar.     

The volume of sales dropped 4.4 per cent to 288,151 vehicles during the third quarter from 301,453 units in the year-ago period. Sales of passenger vehicles in the domestic market declined 5.7 per cent in the first nine months of this financial year — the sharpest decline in more than a decade.  

The company said, “Sales remained under stress during the period, in both domestic and export markets.” Average discount on vehicles stood at Rs 19,000 during the quarter against Rs 12,500 in the year-ago period.

In the quarter, the company’s market share in the domestic market rose 2.5 per cent year-on-year to 42.8 per cent.