Maruti up 3% on better-than-expected September sales data

Moneycontrol Bureau

Investors are buying shares of Maruti Suzuki after the India's largest car maker reported better-than-expected sales numbers in September. The stock gained 3.8 percent in intraday trade Tuesday.

Total sales of the company increased 11.7 percent year-on-year (20 percent sequentially) to 1,04,964 units, led by exports.

Its exports sales jumped 29 percent M-o-M and 181 percent Y-o-Y to 14,565 units in September while domestic sales grew marginally to 90,399 units from 88,801 units Y-o-Y.

Compact car --Swift, Estilo, Ritz -- sales grew by 17 percent year-on-year to 20,828 units from 17,813 units while super compact car like Dzire's sales increased 42.9 percent Y-o-Y to 16,708 units.

Mini cars sales, which are Maruti 800, Alto, A-Star and Wagon R, climbed 4.9 percent Y-o-Y to 41,061 units in September.

Meanwhile, Japanese PM Shinzo Abe has announced a hike in sales tax from 5 percent to 8 percent. Export incentives for Japanese companies will be phased out.

While talking to CNBC-TV18, Maruti said it is too early to assess impact of sales tax hike in Japan. "We are not aware of quantum of export incentive to suppliers," the company added.

Maruti imports components from Japan. Imported components form 20-22 percent of sales, out of which direct imports are at 8-10 percent and indirect via vendors at 12 percent.

Sales tax hike will have no impact on Maruti since it will only impact cars sold in Japan while phasing out of export incentives will have negative impact on component suppliers.

At 11:45 hours IST, the stock was up 2.8 percent at Rs 1,396 on the Bombay Stock Exchange.

(Posted by Sunil Shankar Matkar)