Maruti Suzuki has lost market share from 51 percent to 47 percent in the current quarter. (Representative image)
Maruti: Q2 Result | Profit declines 65% to Rs 475 crore, revenue rises 10% Rs 20,539 crore
India’s largest passenger vehicle manufacturer, Maruti Suzuki India Limited (MSIL), today declared its results for the 2nd Quarter ending September 30, 2021. It has reported a standalone profit after tax of Rs. 475 crore for the quarter, decreasing 65% from Rs 1,372 crore reported in the same quarter last year. On a sequential basis, profit improved marginally by 7% from Rs. 441 crore reported in June-21 quarter.
The company managed to improve its standalone revenues from operations by 10% to Rs 20,539 crore for the quarter, compared to Rs 18,745 crore in Septemeber 2020 quarter. On a sequential basis, the revenues jumped 16% from Rs 17,771 crore.
The performance of the company got impacted because of lower volumes due to the COVID-induced global chip shortage that hit production and margins came under pressure due to high commodity prices.
The company said that, this quarter was also marked by an unprecedented increase in the prices of commodities like steel, aluminium and precious metals within a span of one year. The Company made maximum efforts to absorb input cost increases offsetting them through cost reduction and passed on minimum impact to customers by way of car price increase.
Production woes impacted volumes
The semi conductor chip shortage faced across the world severely impacted the production of the company. The company could not produce approximately 116,000 vehicles owing to the electronics component shortage. The impact was more severe for domestic models.
Owing to loss of production, company could sell a total of 379,541 units during the quarter with domestic market volumes coming in at 320,133 units and exports were at 59,408 units, the highest ever in any quarter. During corresponding quarter last year, the Company had clocked a total sale of 393,130 units including 370,619 units in domestic market and 22,511 units in the export market.
Volume mix
The compact car segment continues to contribute the most to the domestic sales volume for the company with 43% of the total volumes followed by utility vehicles at 23% and minis at 17%. Vans and LCV contribution to the domestic sales volume was 9% and 3% while 4% came from sales to other OEMs.
Healthy order book
The pending orders for the company at the end of the quarter stand at more than 200K units.
Commodity impact on margins
The company continues to face the brunt of higher commodity prices which have increased the production costs for the company. Despite the numerous price hikes implemented by the company during the quarter and cost savings initiatives undertaken, the margins got impacted.
Operating EBIT for the company in this quarter declined 92% to Rs. 99 crore from Rs 1,168 crore reported last year. On a sequential basis, however, the operating EBIT improved 27% from Rs 78 crore reported in previous quarter.
The operating EBIT margins (% of net sales) came in at mere 0.5% as against 6.6% last year and improved marginally from 0.4% in the previous quarter.
PAT margins (% of net sales) stood at 2.5% this quarter as against 7.8% last year and 2.6% in the previous quarter.
The stock closed at 7,356.25 today, up Rs 58.9 (0.8%) from its previous day’s close. It has been more or less flat during the past 1 year, appreciating only 3%. It has generated negative returns of 3.8% during this year and has appreciated 1.6% in the last 3 months.
