India’s Largest Automobile Manufacturer Maruti Suzuki on Thursday has announced that the company has earned a net profit of Rs 1,556.4 crore as increased by 4.4% in the first quarter April- June. Due to the nationwide implementation of the Goods and Services (GST) and higher input cost has reduced the incomes of the company.
As per Thomson Reuters Analysts said that It is anticipated that the company earned Rs 1,701 crore in net profit in the first quarter (April- June). In last financial year, the company had shown a net profit of Rs 1,490.9 crore in the similar period. The sales figure of Maruti Suzuki’s remained powerful which has increased by 13.2% and 39,4571 units of cars were sold in the first quarter.
The total income of the company has enhanced by 17% to Rs 20,460.1 crore as compared with Rs 17,484.1 crore the previous year. Sales of Maruti Suzuki’s premium models such as Brezza and Baleno has included in the company’s benchmark. Maruti Suzuki stated, “Growth in volumes, favourable product mix, higher non-operating income and cost reduction efforts contributed to increase in profits.”
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The total expenses of the company enhanced by Rs 18,161.4 crore and 17.6 in percentage form in the last quarter. Maruti Suzuki informed the Europe stock market that costs were influenced due to marketing expenses, high commodity prices and sales promotion. Apart from these, in the last month of the quarter (June) the company had provided compensation to dealers for the tax loss incurred on cars in the stock, at the time of transforming to the new indirect tax regime.
Bharat Gianani, Research analyst, at Sharekhan, said, “Healthy double-digit top line growth backed by strong volume and the better mix was offset by the drop in the margins. Higher raw material costs coupled with one-time GST compensation to dealers led to a mid-single digit profit growth. Given the waiting period on about 35-40% of its portfolio coupled with fast tracking of capacity addition would drive earnings growth going ahead.”
