India’s largest carmaker Maruti Suzuki India reported a 24 per cent on-year increase in net profit to Rs 1,941.4 crore for the December quarter. The company’s revenues from operations rose 13.3 per cent to Rs. 23,458 crore. The company sold a total of 495,897 vehicles during the quarter, higher by 13.4% compared to the same period the previous year. Sales in the domestic market stood at 467,369 units, growing by 13.0%. Exports were at 28,528 units, higher by 20.6%.
The company reported operating profit growth of 19.3 per cent on-year to Rs. 1,484.8 crore. The growth was on account of higher sales volume and cost reduction efforts partially offset by the increase in commodity prices and adverse foreign exchange movement. The company’s bottom line was helped by a 27 per cent year-on-year rise in other income in the quarter to Rs 993.7 crore.
The carmaker said that capacity utilization in the quarter improved, which reflected in the double-digit volume growth for the company. The operating show was helped by lower promotional costs and overall cost reduction efforts. The company said that increase in commodity prices weighed on the margins, while higher sales of low-margin products than high-margin products also weighed on the operating margin performance.
Maruti Suzuki’s operating earnings before interest, and tax stood at 6.7 per cent of sales in the quarter, up 40 basis points from the year-ago period. However, the margin performance was below analysts’ estimates largely because of a sharp rise in the cost of raw materials.