ECONOMY

Maruti Suzuki Q4 Results: Profit Falls 11%, Margin Contracts

Maruti Suzuki India Ltd.’s profit fell after two quarters even as sales improved.

Net profit of India’s largest carmaker fell 10.7% year-on-year to Rs 1,166 crore in the quarter-ended March, according to an exchange filing. That compares with the Rs 1,699-crore consensus estimate of analysts tracked by Bloomberg.

A steep commodity price increase and a lower non-operating income owing to mark-to-market loss on invested surplus dragged the bottom line, the company said. Maruti Suzuki’s other income dropped 90% to Rs 89.8 crore.

Q4 Highlights (YoY)

  • Revenue rose 26% to Rs 24,113 crore, compared with the Rs 23,918-crore estimate. That’s the third straight quarter of an increase in top line for the company.
  • Earnings before interest, tax, depreciation and amortisation increased 15% to Rs 3,161 crore, higher than the Rs 2,162-crore consensus forecast.
  • Ebitda margin contracted to 13.1% from 14%. Analysts had pegged the metric at 9%.

Improved capacity utilisation, lower sales promotion expenses, increase in selling prices, and cost reduction efforts supported the margin, while adverse commodity prices, foreign exchange fluctuation and lower fair value gains on invested surplus dented profitability, Maruti Suzuki said.

The company sold 4.92 lakh units in the reported quarter, up 28% from the year earlier.

That was aided by a recovery in sales which continued till the fourth quarter after a washout first quarter of fiscal 2019-20 because of the Covid-19 lockdown. Also, Maruti Suzuki’s decision to hike prices from April, the second time this year to counter rising input costs, may have prompted pre-buying in March.

Shares of Maruti Suzuki fell 0.6% to Rs 6,602 apiece after the results were announced compared with a 1.2% gain in the benchmark Nifty 50.

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