Maruti’s Q1 profit more than doubles
Premium- Maruti also said that it is witnessing high traction for its new SUV offensive aimed at filling the gaps in its portfolio of cars.
Maruti Suzuki, India’s largest passenger vehicle maker on Wednesday said its profit grew 129.76% year-on-year to ₹1012.8 crore in the June quarter, from ₹441 crore in the corresponding quarter last year.
During the quarter, Maruti registered net sales of ₹25,286.3 crore, an increase of 50.52% compared to the same period of the previous year.
However, the profit is lower than what analysts had estimated. Maruti Suzuki had to take an impairment of 51,000 units in the first quarter of the ongoing fiscal for the lack of semi-conductor chip availability. Its total order backlog stands at 350,000 units.
On Wednesday, the country’s largest carmaker also said that it is witnessing high traction for its new SUV offensive aimed at filling the gaps in its portfolio of cars.
The automaker has received 20,000 bookings for its new flagship mid-sized SUV Grand Vitara in just over a week after its global unveil, Maruti Suzuki management told analysts on a conference call on Tuesday. The SUV, poised to take on competitors like the Hyundai Creta and the Kia Seltos, is also the first strong hybrid from the Maruti Suzuki stable.
Nearly half of the bookings Maruti Suzuki has received for the Grand Vitara, which is slated for a festive season launch in September, are for the strong hybrid variant - which could be a potential game-changer for the passenger vehicle market in India, and a significant proof of market appetite for hybrids in India, where hybrid vehicles have struggled to make a mark.
Additionally, the newly relaunched compact SUV Brezza has also clocked over 70,000 bookings.
Maruti lost nearly 4% in market share over the last fiscal year because of the lack of a competitive SUV portfolio, and success of its new product cycle is a critical step in the company gaining lost ground.
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“Maruti Suzuki has reported lower than expected performance in Q1FY23 due to lower operating leverage. We expect the domestic passenger vehicle industry to record double digit volume growth in FY23 and FY24, which would support MSIL’s business. Moreover, sales of premium products would increase further", according to securities research firm Reliance Securities.
Maruti Suzuki has also amped up discounts on its slow-moving products by an average of Rs2000 per vehicle.
“The increase in prices of commodities adversely impacted our operating profit in this quarter. The Company was forced to increase prices of vehicles to partially offset this impact. The Profit Before Tax was also impacted by the non-operating income being lower in this quarter due to mark-to-market loss. The company continued to work on cost reduction efforts to minimize the impact on customers", Maruti Suzuki said in a press release.
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