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Maruti Suzuki Q2 profit up 60% on record sales

 

Maruti Suzuki Q2 profit up 60% on record sales

  Riding on record sales, country's largest carmaker Maruti Suzuki India on Thursday posted 60.18% jump in net profit to Rs 2,398 crore for the quarter ended September 30, its "best ever" quarterly profit.

 

It had posted net profit of Rs 1,497 crore during the July-September period of last financial year 2015-16.

Its total income from operations rose by 29.28% to Rs 20,296.8 crore during the second quarter of the current financial year as against Rs 15,699.7 crore in the year-ago period, MSI said.

The company sold 4,18,470 vehicles during the quarter under review, a growth of 18.4% over a year ago.

Maruti Suzuki India Chairman R C Bhargava said: "It has been in many ways best quarter we have ever had."

As per the second quarter performance in the ongoing financial year, on annualised basis, the production would have crossed 1.7 million cars, which is "way beyond 100% capacity utilisation", he added.

Bhargava said the company's profitability was driven by high capacity utilisation due to robust sales. "When you have capacity utilisation like we have now, every extra car we make adds to profit because of reduced overheads, including depreciation."

The company's sales in the period under review were at best in a quarter beating the previous record of 3,60,402 units in the fourth quarter of 2015-16.

In terms of profit as well, this is its highest in a quarter breaking the record of Rs 1,486 crore posted in the first quarter (April-June) of 2016-17. During the quarter, the company's average discounts were less at Rs 16,100 as compared to Rs 19,500 in the same period last year.

MSI said lower expenses on sales promotion and marketing and higher non-operating income also contributed to increase in profit.

This was partially offset by adverse foreign exchange movement, which stood at a total of Rs 145 crore for the quarter, after taking into account royalty payment, import and export expenses.

Maruti Suzuki shares closed at Rs 5,868, down 0.07% on BSE.