Maruti Q2 net falls 9.8 per cent to Rs 2,240 cr
The countrys largest carmaker Maruti Suzuki India MSI on Thursday reported its first decline in quarterly profit in over four years as a dip in rupee value, rise in commodity prices and higher sales promotion expenses hit its margins
New Delhi: The country's largest carmaker Maruti Suzuki India (MSI) on Thursday reported its first decline in quarterly profit in over four years as a dip in rupee value, rise in commodity prices and higher sales promotion expenses hit its margins.
The auto major, which has over 50 per cent market share in the domestic passenger vehicle segment, reported a 9.8 per cent decline in net profit at Rs 2,240.4 crore for the second quarter ended September 30.
The company had reported a net profit of Rs 2,484.3 crore for the same period of previous fiscal. Net sales, however, rose marginally to Rs 21,551.9 crore for the quarter under review, as against Rs 21,438.1 crore a year earlier. Sales dipped 1.5 per cent during the July-September period at 4,84,848 units as rising fuel prices and changes in insurance impacted overall buyer sentiment during the period.
"There has been a significant impact of rising oil prices. Plus the fact that it was decided that this year three years insurance premium has to be paid at the time of the buying… close to Rs 9,000 a customer has to pay extra at the time of buying has also impacted the sentiment," MSI Chairman R C Bhargava told reporters here.
Similarly, sentiments and laws relating to diesel have become more adverse and the uncertainty relating to the vehicles run on the fuel particularly in Delhi/NCR has also impacted the buyer sentiment, he added.
"We have committed for 10 per cent sales growth this fiscal and we will continue to make best efforts to achieve this figure. However, going by the current circumstances it is not going to be an easy task," Bhargava noted.
The company's quarterly net profit has dipped after 17 quarters with the last decline taking place in the fourth quarter of 2013-14. Bhargava said that the current festival season has failed to bring in numbers and sales remain same as before.
"So far the festival season has not shown any buoyancy in sales. We used to witness a sales growth of around 10-15 per cent during the festive season but this year there is no indication for such a growth," Bhargava said. He added that the company is ramping up production of CNG cars as the government is trying to promote the fuel with plans to add another 10,000 CNG outlets in the country.
"Currently we have eight models which offer CNG option. Our sales of such vehicles this year have grown over 50 per cent last year which clearly demonstrates the customer preference for CNG vehicles," Bhargava said.