Subdued demand for higher-margin diesel vehicles and high discounts notwithstanding, Maruti Suzuki managed a top line growth of 11 per cent in the June quarter, over the corresponding period last year.

With the price gap between diesel and petrol narrowing, the share of Maruti’s diesel vehicles has come down to about 31 per cent of total vehicles sold, from 34 per cent in the June 2013 quarter.

Volume growth has been almost flat in the diesel segment for this period.

The company’s average discounts have also stood at around ₹21,000, in contrast to the ₹13,500-levels seen a year ago.

What has helped Maruti is a general pick-up in demand for cars during the quarter, along with higher export realisations.

With the slowdown in the industry slowly beginning to wind down, total sales volumes showed a 12 per cent growth year-on-year. The better capacity utilisation, given the improved demand, brought with it additional operating leverage.

So, despite slight increase in raw material costs, operating margins came in at 11.7 per cent, a tad higher than 11.4 per cent recorded last year.

Margins were also helped by ongoing localisation efforts, with import content standing at 16 per cent of net sales, compared to 20-25 per cent two-three years ago.

Despite pressure from higher depreciation and employee costs, higher other income from capital gains on investments helped net profit growth of 21 per cent.

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