Maruti Suzuki India Ltd on Tuesday reported a net profit of ₹802 crore for the third quarter ended December 31, up 18 per cent compared with ₹681 crore in the corresponding period last year.
The results were broadly in line with analysts’ estimates.
“The company reported an EBITDA ( earnings before interest, taxes, depreciation, and amortisation) margin of 12.7 per cent and other expenses have been higher than expected due to an exceptional item related to excise duty demand on sales tax subsidy,” said analysts at Emkay Research.
“Higher volumes, material cost reduction initiatives and favourable foreign exchange contributed to the bottom-line during the quarter,” the company said.
Added Arun Agarwal, an auto analyst at Kotak Securities: “Maruti Suzuki reported a strong set of results.
The company is expected to benefit from multiple earnings growth lever in the next two-three years. Expected demand recovery for small cars and new launches will drive volume growth for the company.”
Weak market conditions But the carmaker feels market conditions are still weak and it may take some more time for demand to pick up fully.
“The (current) situation indicates that we have to support sales with incentives. The quantum of average discounts during the quarter across models was around ₹21,000 per vehicle,” Ajay Seth, Chief Financial Officer, Maruti Suzuki, said, adding the discounts were unlikely to be withdrawn before the second half of the next fiscal.
Volume-wise, the country’s largest passenger cars manufacturer sold 3,23,911 units during October-December, compared with 2,88,151 units in the corresponding period in 2013. Of these, 2,95,202 units were sold in the domestic market during the quarter against 2,68,185 units a year ago, it said.
On Tuesday, the Maruti Suzuki scrip closed at ₹3,685.20 on BSE, up 2.12 per cent from the previous close.
Also read: Maruti: Gearing up for good times