Maruti Suzuki Q2 profit dips 39% YoY to Rs 1,359 crore, revenue slips 24%

India’s largest car maker Maruti Suzuki on Thursday reported a net profit of Rs 1,358.6 crore for the September quarter of FY20, down 39.4 per cent YoY from Rs 2,240.4 crore reported in Q2FY19.

The profit, however, beat analysts estimates. Analysts at Prabhudas Lilladher, for instance, had pegged the profit at Rs 1,100 crore.

Net profit for the quarter declined by 39.4 per cent compared to the same period previous on account of lower sales volume, higher sales promotion expenses and higher depreciation expenses, partially offset by cost reduction efforts, higher fair value gains on invested surplus and reduction in corporate tax rate, the company said.

The revenue for the recently concluded quarter came in at Rs 16,120.4 crore, down 24 per cent YoY, while sales of the auto-maker slipped 30.2 per cent YoY. Sequentially, the revenue slipped 14 per cent.

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“The Company sold a total of 338,317 vehicles during the Quarter, lower by 30.2% compared to the same period previous year. Sales in the domestic market stood at 312,519 units, lower by 31.4%. Exports were at 25,798 units,” the company said in a statement.

The EBITDA came in at Rs 1,606.3 crore, down 53.2 per cent YoY. The margin slipped 580 bps to 9.5 per cent.

Lower capacity utilization, higher sales promotion expense, and higher depreciation expense affected the margin, the company's financial statement showed.

"We believe the decline in raw material prices to be offset by unfavourable currency movement and negative operating leverage. Hence margins are expected to be at 10 per cent, down 40 basis points sequentially. Earnings before interest, taxation, depreciation, and amortisation (Ebitda) is seen at Rs 1,677 crore, down 48 per cent YoY from Rs 3,231 crore in the year-ago quarter," analysts at Prabhudas Lilladher had said in a results preview note.

At 1:50 pm, the stock was trading 1.2 per cent lower at Rs 7,350 per share, as against a 0.32 per cent decline in the benchmark S&P BSE Sensex.