Maruti Suzuki India June-quarter profit dives, but tops estimates

Bengaluru: Maruti Suzuki India Ltd on Friday posted a 27.3% plunge in its first-quarter net profit amid an industry-wide slowdown in demand, but beat market expectations.

Profit came in at 14.36 billion rupees ($208.11 million), compared with 19.75 billion rupees a year earlier.

Analysts on an average expected the carmaker to post a profit of 13.96 billion rupees, according to Refinitiv data.

Revenue from operations fell 12.2% to 197.20 billion rupees.

Maruti`s results underscore slowing demand in the country`s auto sector, which has been hit by a credit squeeze, higher insurance costs and a pile-up of inventory, prompting automakers including Maruti Suzuki and Ashok Leyland to cut production. A government push towards electric vehicles has also worried the traditional industry.

Costs dropped 6% during the quarter, the company said in a statement.

The company, which popularised car ownership in the country with its iconic Maruti 800 model, said it sold 402,594 vehicles in the three months ended June 30, down nearly 18% from a year-ago period.

Car sales are considered one of the key barometers of economic growth, which in India slowed to 6.8% for the year ended March 31, its slowest rate of expansion in five years.

On Thursday, rival Tata Motors Ltd widened its June-quarter loss to 36.98 billion rupees ($535.93 million), compared with a loss of 19.02 billion rupees a year ago.

The country`s biggest automaker by market capital, majority owned by Japan`s Suzuki Motor Corp, said in April it would phase out all diesel cars, starting April next year.

Shares of the automaker were trading 1.9% higher in afternoon trade, compared with a broader Mumbai market that was up 0.2%.