Maruti Q1 profit up 23%, beats estimates

NEWDELHI: Maruti Suzuki, India’s top-selling car maker, posted a forecast-beating23% rise in first-quarter net profit on Tuesday, as higher sales offset the adverse

NEWDELHI: Maruti Suzuki, India’s top-selling car maker, posted a forecast-beating23% rise in first-quarter net profit on Tuesday, as higher sales offset the adverse impact of an unfavourable foreign exchange rate.

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Maruti, which is controlled by Suzuki Motor through the Japanese company’ s 56.2% stake, said profit for the April-June quarter was₹1,486 crorefrom₹1,208 crore in the same period a year ago. Net sales rose 12% to ₹14,650 crore.

Analysts had expected the company to post a profit of ₹1,239 crore, Thomson Reuters data showed. However, its shares fell by 1.44% on the BSE to end at ₹4,485.25 per share.

Maruti’s results are increasingly important to parent Suzuki as the Japanese company recovers from an emissions testing scandal at home. Suzuki’s stake in Maruti is worth $11.5 billion (₹77,400 crore), or nearly 80% of the Japanese company’ s $14.5 billion (₹97,500 crore) market value.

“The profit in the quarter was helped by a higher turnover, material cost reduction, higher non-operating income and lower depreciation,” it said in an emailed statement .“Adverse foreign exchange movement reduced profits to some extent.”

The yen appreciated 11% against the rupee during April-June, Reuters data said, raising Maruti’s outgo for imports and the royalty it pays to its parent.

The firm said it sold 348,443 units during the quarter, a growth of 2.1% a year ago. This includes 322,340 units in domestic market and 26,103 units for exports. Ma rut i’ s quarterly vehicles sales were tepid due to 10% fall in sales in June because of a fire at Subros Ltd.