The country’s biggest car maker Maruti Suzuki reported a record profit of Rs 2,398 crore during the quarter ended September 30, helped by double-digit sales growth, high non-operating income and lower discounts.
This is a 60% increase over the same quarter last year. Maruti Suzuki’s profit beat the consensus estimate of Rs 1,765 crore by analysts tracked by Bloomberg.
Maruti Suzuki’s income from operations rose 29.28% to Rs 20,296.8 crore during the quarter from Rs 15,699.7 crore in the year-ago period.
Reacting to the results, the company’s stock hit a new high of Rs 5,950.20 on the Bombay Stock Exchange before closing at Rs 5,859.75.
Maruti Suzuki sold a record 418,470 vehicles during the quarter, 18.4% more than the same period of the previous year. Its plants are operating at 100% capacity.
Lower marketing expenses and new models like the Baleno and Brezza aided profitability. The average discount per vehicle was Rs 16,100 during the quarter against Rs 19,500 in the same period a year ago.
Other income rose 71% to Rs 812 crore. The company’s earnings before interest, depreciation, tax and amortisation (EBIDTA) margin improved to 17% from 16.3% in the corresponding quarter last year.
“We have a neutral (view) on the stock due to its valuation. We continue to highlight Maruti as the best play in the Indian automotive sector,” said an analyst at Phillip Capital.
“It has been in many ways best quarter we have ever had,” said Maruti Suzuki Chairman RC Bhargava. He added the company’s profitability was driven by high capacity utilisation and robust sales.
“When you have capacity utilisation like we have now, every extra car we make adds to profitbecause of reduced overheads, including depreciation,” Bhargava said.