Strong sales, low base push Maruti net up by over two-fold
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Low-base and higher sales of models like Swift and Ertiga saw the country's largest car manufacturer Maruti Suzuki beat street expectations to post a near two-and-half times jump in its net profit at Rs 501.29 crore during the October-December period
The net profit during the same period last fiscal was Rs 205.62 crore when the company's output was hit by a labour strike at its Manesar plant. In fact, Maruti posted a rise in profitability after a gap of six quarters.
The company's net sales during the period rose 45.56 per cent at Rs 10,956.95 crore against last year's Rs 7,527.10 crore.
While the low base of Q3 last year, when production was low because of a labour dispute at its Manesar plant, helped boost profits, the strong improvement in the bottom line also came from a more favourable product mix aligned towards higher margin products like diesel cars and more premium models such as the Ertiga MPV.
Meanwhile, the rupee's depreciation also helped Maruti gain from higher export realisation. Better-than-expected earnings saw the company's shares close up 4.15 per cent at Rs 1,600.20 on the BSE.
Chairman RC Bhargava said that apart from the low base effect, a huge benefit came from the doubling of diesel car sales such as the Ertiga and Swift Dzire during the period. "In this quarter, we sold over a lakh diesel cars as compared to 50,000 units in the same quarter last year. Rupee depreciation and cost reduction measures also helped boost margins, but the benefit of Yen depreciation will only come next quarter," he said.
Though the company did not provide any sort of guidance regarding sales in the coming quarters, Bhargava added that he does not see industry sales to pick up in the next quarter as well as the next fiscal. FE
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