Maruti Suzuki India, the country's top-selling car maker, posted a 4.4 percent rise in quarterly profit on Thursday, but missed estimates as a rise in commodity prices and the impact of a new nationwide sales tax ate into earnings.
The company said that higher deferred tax provision, firm commodity prices, sales and marketing expenses and compensation to dealers for the transition to GST impacted performance.
Maruti posted a net profit of Rs 1,556 crore in the quarter, up 4.4% over the corresponding period of last year. Net sales expanded almost 17% to Rs 17,132 crore. The company sold 394,571 vehicles in Q1, a growth of 13.2% over the same period last year. Of this, exports were at 26,140 units. The company’s stock had hit a new high of Rs 7,679 on the BSE earlier in the day and was trading at Rs 7,618, up 0.53% at 1.45 pm.
The company said that growth in volumes, favourable product mix, higher non-operating income and cost reduction efforts contributed to the increase in profits. However, costs were impacted by higher commodity prices, sales promotion sand marketing expenses.
During the quarter, there was a one-off impact of compensation given to dealers for the tax loss incurred on vehicles in the stock at the time of transitioning to GST.