Maruti Suzuki drops in volatile trade after reporting weak sales in June

Maruti Suzuki India declined 0.43% to Rs 4,167.45 at 11:15 IST on BSE after the company announced that total sales declined 13.9% to 98,840 units in June 2016 over June 2015.

The announcement was made during market hours today, 1 July 2016.

Meanwhile, the S&P BSE Sensex was up 242.93 points or 0.9% at 27,242.65.

On BSE, so far 31,255 shares were traded in the counter as against average daily volume of 80,377 shares in the past one quarter. The stock was volatile. At the day's high of Rs 4,213.50, the stock rose 0.67%. At the day's low of Rs 4,130 so far during the day, the stock fell 1.31%. The stock had hit a 52-week low of Rs 3,202.10 on 29 February 2016. The stock had hit a record high of Rs 4,789 on 23 November 2015. The stock had outperformed the market over the past one month till 30 June 2016, gaining 2.75% compared with Sensex's 1.03% gains. The stock had also outperformed the market in past one quarter, rising 12.26% as against Sensex's 6.56% rise.

The large-cap company has equity capital of Rs 151.04 crore. Face value per share is Rs 5.

Maruti Suzuki India said that domestic sales dropped 10.2% to 92,133 units in June 2016 over June 2015. Exports slumped 44.7% to 6,707 units in June 2016 over June 2015.

Maruti Suzuki India (MSIL) said that that there was a disruption in production during June 2016, due to the unfortunate incident of fire at Subros, a key vendor of the company. The company expects to recover the production loss during the course of the year. The company added that together with its employees and vendors, company is gradually stepping up production of newly launched models - Baleno and Brezza to service the pending demand.

Separately, Maruti Suzuki India announced after market hours yesterday, 30 June 2016, that it has signed a memorandum of understanding (MoU) with Government of Andhra Pradesh, to set up, manage and run Institute of Driving Training and Traffic Research at Venkatachalam village in Darsi, Prakasham district of Hyderabad. The infrastructure spread across 20 acres of land will be provided by the Andhra Pradesh Government, while Maruti Suzuki India will run and manage the institute. The infrastructure is expected to be completed by 2018.

Set up under the public-private-partnership (PPP) model, this will be Maruti Suzuki India's first Institute of Driving Training and Traffic Research (IDTR) in South India. The company will undertake the training on lines of the other IDTRs including All Gujarat Institute of Driving, Technical Training and Research (AGIDTTR), Vadodara. The company plans to collaborate with the various government departments like Tribal Development Department to promote road safety and driving as an employment opportunity among the tribal youth of Andhra Pradesh. The main focus is to make people employable hence additional training in personality, hygiene, courtesy and communication is imparted to the youth.

Maruti Suzuki India's net profit declined 11.7% to Rs 1133.60 crore on 12.5% growth in net sales to Rs 14929.50 crore in Q4 March 2016 over Q4 March 2015.

Maruti Suzuki India is India's biggest car maker in terms of market share. Japanese parent Suzuki Motor Corporation currently holds 56.21% stake in Maruti (as per the shareholding pattern as on 31 March 2016).

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