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Maruti Q2 Result | Profit declines 65% to Rs 475 crore, revenue rises 10% to Rs 20,539 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.

October 27, 2021 / 04:14 PM IST
Maruti Suzuki has lost market share from 51 percent to 47 percent in the current quarter. (Representative image)

Maruti Suzuki has lost market share from 51 percent to 47 percent in the current quarter. (Representative image)

 
 
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India’s largest passenger vehicle manufacturer Maruti Suzuki India Limited (MSIL) on October 27 declared its results for the second quarter ending September 30, 2021. It has reported a standalone profit after tax of Rs 475 crore for the quarter, decreasing 65 percent from Rs 1,372 crore reported in the same quarter last year. On a sequential basis, profit improved marginally by 7 percent from Rs 441 crore reported in the June 2021 quarter.

The company managed to improve its standalone revenues from operations by 10 percent to Rs 20,539 crore for the quarter, compared to Rs 18,745 crore in September 2020 quarter. On a sequential basis, the revenues jumped 16 percent 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 impact volumes

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The semiconductor 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, the 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 the corresponding quarter last year, the company had clocked a total sale of 393,130 units including 370,619 units in the 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 percent of the total volumes followed by utility vehicles at 23 percent and minis at 17 percent. Vans and LCV contribution to the domestic sales volume was 9 percent and 3 percent while 4 percent 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 its production costs. 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 percent to Rs 99 crore from Rs 1,168 crore reported last year. On a sequential basis, however, the operating EBIT improved 27 percent from Rs 78 crore reported in the previous quarter.

The operating EBIT margins (percentage of net sales) came in at mere 0.5 percent as against 6.6 percent last year and improved marginally from 0.4 percent in the previous quarter.

PAT margins (percentage of net sales) stood at 2.5 percent this quarter as against 7.8 percent last year and 2.6 percent in the previous quarter.

The stock closed at 7,356.25 today, up Rs 58.9 (0.8 percent ) from its previous day’s close. It has been more or less flat during the past 1 year, appreciating only 3 percent. It has generated negative returns of 3.8 percent during this year and has appreciated 1.6 percent in the last 3 months.
Moneycontrol News
first published: Oct 27, 2021 02:30 pm

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