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Maruti Suzuki on Tuesday reported a net profit of Rs 1,166 crore for the three months to March, a fall of 9.7% year-on-year despite a strong top-line growth of nearly 34% y-o-y to Rs 22,959 crore.
The country’s biggest carmaker was impacted by rising commodity prices and lower non-operating income owing to a mark-to-market loss on invested surplus.
The management observed that production has not been hit during the second wave of Covid-19. Moreover, retail sales, chairman RC Bhargava said, had not been impacted so far and the company had been able to sell the numbers produced. Bhargava pointed out that even if some markets are shut, sales are emanating from “enough markets” which are are open.
However, he said it would be difficult to predict how the rest of the quarter would play out. “Nobody knows what will happen and what conditions or restrictions might be imposed. I would not like to make a forecast for the quarter,” he said.
The carmaker’s operating margins remained flat at 9% during the quarter while the Ebitda (earnings before interest, tax, depreciation and amortisation) increased 28.7% y-o-y to Rs 1,991 crore.
Despite two prices, the company as unable to pass on the 3% increase in raw material costs. Bhargava expressed concern prices of steel were rising and there was no way of getting a steel producer to commit to a fixed price for six months. “We have to keep watching the situation and take decisions according to what happens in the marketplace,” he said.
Bhargava also said a close watch was being kept on the oxygen situation, which is not directly consumed by it but could be an issue for vendors. “We ourselves are small users, our vendors are much larger users and production can happen only when all of us are able to work to our capacity,” he said.
Maruti sold a total of 4.92 lakh vehicles during the quarter, higher by 27.8% y-o-y. Sales in the domestic market stood at 4.56 lakh units, growing by 26.7%, while exports rose by 44.4% to 35,528 units.
The increase comes on a lower base, as there was a significant decline in the sales volume largely owing to Covid-19 lockdown in Q4FY20.
Maruti has around 1,280 active Covid-19 cases of the total employee strength of 30,000 people. Bhargava added that the pandemic has not affected the availability of people on the assembly lines and the company is maintaining full production.
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