The company had reported a net profit of Rs 3,069.2 crore in the corresponding period of the last financial year. Brokerage firm Motilal Oswal had expected the company to report an 8% increase in net profit in the reporting period.
Net sales rose 12.7% to a record Rs 40,135.9 crore last quarter, compared to Rs 35,589.1 crore in the year-ago period. Total expenses in the quarter under review rose 15% to Rs 38,762.9 crore compared to Rs 33,577.3 crore in Q2FY25.
“Domestic wholesale fell 5.1% to 4,40,387 units in the quarter as customers deferred purchases amid expectations of price reduction under the Goods and Services Tax (GST) from September 22. Maruti Suzuki chairman RC Bhargava said, “The entire industry is optimistic about the future. We saw record sales during the holiday season (which started in the last week of the second quarter). We expect sales in the sector to be substantially better in the second half of the year. The industry should grow by around 6% in the second half of the year.”
Bhargava said the tax cuts have brought into the market many customers who previously could not afford a car. “The GST cut has proven wrong in the perception that the market has gone up. We see a lot of people wanting to buy small cars,” he said.
In October, Maruti Suzuki saw retail sales of small cars (cars under 4 meters in the 18% GST category) grow by 30%. Those of larger vehicles (taxed at 40%) rose by 4-5%. Overall, the company saw vehicle retail sales grow 20%. The company saw the share of mini cars – Alto K10, Spresso, WagonR and Celerio – in total sales rise to 20.5% after the GST cut, compared to 16.7% before the realignment in the April 1 to September 21 period. Demand is especially robust in rural markets, the company said. While bookings in the top 100 cities grew by 50% after the GST cut, the rate was even higher than 65%, Bhargava said. Maruti Suzuki has added 500 new touchpoints in rural markets in the last 18 months and is said to be looking to leverage its extensive network to further boost sales.
Bhargava said while the growth rate of car sales will moderate compared to the festive season, the lower tax rate will help sustain demand, result in increase in production and ultimately increase tax collection for the Center. Maruti Suzuki will finalize the details of investing in and commissioning a fifth manufacturing facility in the country next financial year, he said. Given the strong growth in the small car market, the company said it will also re-examine medium-term (till FY31) growth targets in India.
Last quarter, Maruti Suzuki saw exports grow a robust 42.2% to 1,10,487 units, the highest ever in any quarter. Total sales grew by 1.7% to 5,50,874 units last quarter. The company said it is on track to export more than 400,000 units in the current fiscal.
Shares of Maruti Suzuki closed at Rs 16,191.90 apiece, down 0.08% at the close on the BSE.
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