Maruti Suzuki Q2 Results: Profit Rises 1%, Revenue Up 10% As Car Sales Improve

Maruti Suzuki India Ltd. swung back to profit but missed estimates as demand for its small cars improved after India eased its stringent lockdown curbs.

Net profit of India’s largest carmaker rose 1% year-on-year to Rs 1,371 crore in the three months ended September, according to an exchange filing. That compares with the Rs 1,519-crore consensus estimate of analysts tracked by Bloomberg.

The bottom lime is still an improvement from a year-on-year loss of Rs 249.5 crore in the preceding three months.

Maruti Suzuki Q2 Results 2020-21: Key Highlights (YoY)

• Revenue rose 10% year-on-year to Rs 18,744 crore, compared with the Rs 19,137-crore estimate.
• Earnings before interest, tax, depreciation and amortisation—a measure of the company’s profitability—rose 20% to Rs 1,933 crore.
• Ebitda margin stood at 10.3% against 9.5%.

The New Delhi-based carmaker saw its dispatches improve in the second quarter as the country restarted most activities to revive the economy that’s headed towards a rare annual contraction in more than four decades. The lockdown had forced India’s automakers—already braving the worst prolonged slowdown in more than two decades even before the pandemic—to stall operations, leading to a washout in the initial months.

Maruti Suzuki wasn’t immune either. Its sales fell over 80% year-on-year in the first quarter of the ongoing fiscal. But as demand started to improve, the firm sold 3.9 lakh vehicles in the second quarter, a near 15% increase over a year ago.

The automaker is also bullish on the upcoming festive sales, reflected in higher inventory levels at dealerships. Still, concerns persist over the willingness of financial institutions to finance the purchase of vehicles, as BloombergQuint had reported last month, indicating a complete recovery is still time away.

Shares of Maruti Suzuki were trading 1.20% lower after the quarterly results were announced, compared to the benchmark Nifty 50's 0.59% drop.