Maruti Suzuki India fell 1.26% to Rs 7,345.50 after consolidated net profit fell 39.4% to Rs 1358.60 crore on 25.2% decline in net sales to Rs 16120.40 crore in Q2 September 2019 over Q2 September 2018.
The announcement was made during market hours today, 24 October 2019.
Net profit declined on account of lower sales volume, higher sales promotion expenses and higher depreciation expenses, partially offset by cost reduction efforts, higher fair value gains on invested surplus and reduction in corporate tax rate.
The company sold a total of 338,317 vehicles during the quarter, lower by 30.2% compared to the same period previous year. Sales in the domestic market stood at 312,519 units, lower by 31.4%. Exports were at 25,798 units.
The results of the company for the quarter (July-September) and half year (April-September) FY 2019-20 have to be viewed in the context of exceptionally weak demand environment. This year, the automobile industry has seen a significant decline in sales owing to several factors. One of the main factors is increase in the cost of acquisition of the car due to various reasons coming together like implementation of more stringent safety and emission (BS6) norms, increase in vehicle insurance expenses and hike in road taxes in many states. Along with this, the lower availability of finance and increased down payment requirement have affected the affordability of customers to own cars.
Meanwhile, the S&P BSE Sensex was down 128 points or 0.33% to 38,930.48.
On the BSE, 76,529 shares were traded in the counter so far compared with average daily volumes of 54,906 shares in the past two weeks. The stock hit an intraday high of Rs 7,480 and an intraday low of Rs 7,275 so far during the day.
The stock hit a 52-week high of Rs 7,929 on 19 December 2018. The stock hit a 52-week low of Rs 5,447 on 31 July 2019.
Maruti Suzuki India is engaged in the manufacture, purchase and sale of motor vehicles, components and spare parts (automobiles). The other activities of the firm comprise facilitation of pre-owned car sales, fleet management and car financing.
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