Maruti Suzuki reports over two-fold rise in Q1 net profit at Rs 1,013 cr

India’s largest carmaker Maruti Suzuki India (MSIL) on Wednesday reported over a twofold jump in its consolidated net profit in the April-June quarter (first quarter, or Q1) of 2022-23 (FY23).

Its net profit jumped to Rs 1,013 crore, mainly due to a low base in the year-ago period when the company had reported a Rs 440.8-crore profit. The company’s production was hampered by Covid-related disruptions.

It sold a total of 467,931 vehicles during the quarter, with exports being the highest ever at 69,437 units. The automotive major has hiked prices 6x from January 2021 to June this year, while cutting back on discounts as demand rebounded from pandemic lows. The company’s profit performance for Q1FY23 fell short of expectations.

According to a Bloomberg poll, analysts had pegged the earnings before interest, tax, depreciation, and amortisation (Ebitda) at Rs 2,217 crore and net profit at Rs 1,570 crore. The actual numbers came in at Rs 1,912 crore (Ebitda) and Rs 1,013 crore (net profit). Net sales at Rs 26,500 crore were a smidgen ahead of estimates of Rs 25,778 crore.

MSIL registered net sales of Rs 25,286.3 crore, against Rs 16,798.7 crore a year ago. Its operating Ebit profit stood at Rs 1,260.7 crore, against Rs 77.9 crore in Q1 of 2021-22. Ebitda margin — a key measure of profitability — came in at 7.2 per cent during the quarter, from 4.6 per cent year-on-year.  Highlighting the impact of the pandemic, it said that a shortage of electronic components in this quarter resulted in about 51,000 vehicles not being produced. Pending customer orders stood at about 280,000 vehicles at the end of the quarter. The company said it was making efforts to fulfil these orders. Operating profit in the said quarter increased to Rs 1,260.7 crore, from Rs 77.9 crore in the same quarter in the preceding financial year. “An increase in the prices of commodities adversely impacted the operating profit in Q1FY23,” said MSIL in a statement, adding it was forced to increase the prices of vehicles to partially offset this impact.

Profit before tax was also impacted by non-operating income being lower in this quarter due to mark-to-market loss.

“The company continued to work on cost reduction efforts to minimise the impact on customers,” it said.

Shares of MSIL gained over 1.5 per cent to close at Rs 8,660.05 per share on the BSE, against nearly 1 per cent rise in the S&P BSE Sensex.