Like in the June 2015 quarter, successful launches and expanding margins have stood by Maruti Suzuki in the quarter ended September 2015.

During this period, Maruti’s top-line growth (13 per cent to ₹13,575 crore) was supported both by a 10 per cent growth in volumes and a three per cent increase in average realisations year-on-year. An improved product mix from the addition of Celerio, Ciaz and the SX4 S -Cross to the portfolio has improved average realisations. Besides other factors, benign commodity costs and favourable forex movements have taken operating margins to 16.7 per cent vis-à-vis 12.7 per cent a year ago. The company imports about 15-20 per cent of its raw material requirements, predominantly from Japan. Raw materials as a percentage of sales stood only at 74 per cent this quarter against 77 per cent a year ago.

Apart from trucks and buses, cars have been the fastest growing segment so far this fiscal. While the industry volumes have grown by 9.7 per cent, Maruti’s volumes grew faster at 12.6 per cent. As a result, the company’s market share for April-September 2015 moved up to 53.4 per cent, from 52 per cent during the same period last year.

The good run is expected to continue. Improved consumer sentiments from lower inflation and interest rates can keep the volume growth ticking. Besides, launches lined up in hitherto untouched segments will help further improve product mix, and hence, realisations and margins. The company has come out with its premium hatchback the Baleno, recently. A compact SUV is also expected to be launched.

The shifting product mix towards sedans and utility/crossover vehicles also means that the company will be less affected by the current slowdown in rural sales, where cars with lower price points are more in demand.

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