Maruti Suzuki India Ltd., the dominant player in India’s automotive market, reported a quarterly profit that fell short of expectations, revealing the challenges the company faces from escalating raw material costs.
Despite a robust increase in sales volume, the carmaker’s profitability was squeezed by a substantial jump in production expenses.
This scenario highlights the fine line between revenue growth and cost management, particularly in industries sensitive to commodity price fluctuations.
Profit below forecast: a detailed look at the numbers
The company’s net income for the three months ending December 31 rose by 13% year-over-year to 35.3 billion rupees ($408 million).
However, this figure was below the average analyst estimate of 36.04 billion rupees, according to Bloomberg.
While revenue saw a healthy 16% climb to 384.9 billion rupees, almost matching analyst projections, total costs surged by the same rate to 348.8 billion rupees, largely due to a 17% increase in raw material expenses compared to the same period last year.
These numbers paint a picture of a company navigating strong demand while battling a significant increase in operational costs.
A closer examination: consolidated and standalone results
Maruti Suzuki’s consolidated net profit for the December quarter also showed strong growth, with a 16.22% year-on-year jump to ₹3,726.9 crore, compared to ₹3,206.8 crore in the same period last year.
Total consolidated revenue from operations rose by 15.7% YoY to ₹38,764.3 crore, from ₹33,512.8 crore in the corresponding quarter of the previous fiscal year.
On a standalone basis, the company’s profit grew by 13% YoY to ₹3,525 crore, up from ₹3,130 crore.
While the absolute numbers showed growth, the marginal decline in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin to 11.6% from 11.7% YoY points towards pressures on profitability.
Sales surge: a record-breaking quarter for Maruti
The quarter saw Maruti Suzuki record its highest-ever net sales of ₹36,802 crore, against ₹31,860 crore in the same period last year.
Sales volume increased by nearly 13% YoY with a total of 566,213 vehicles sold during the quarter compared to 501,207 units in the same quarter last year.
The domestic market saw sales of 466,993 units, up from 429,422 units in the previous year.
The company also achieved its highest-ever quarterly export volume, shipping 99,220 units— a significant increase from 71,785 units during the same period last year.
These figures show that the company’s market position remains strong, especially in domestic and export markets.
Nine-month performance: continued growth and profitability
Maruti Suzuki also reported its best-ever nine-month sales volume, net sales, and net profit for the current financial year.
In the April-December period, the company sold 1,629,631 units, a 5% increase over the same period last year.
Domestic sales totaled 1,382,135 units, and exports reached 247,496 units.
The company registered net sales of ₹1,06,266.4 crore and a net profit of ₹10,244.1 crore for the nine-month period.
These results highlight the company’s sustained growth despite headwinds in the broader market.
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