Maruti Suzuki Q2 profits soar 80.3% YoY to Rs 3,716.5 crore

Bengaluru: Maruti Suzuki India on Friday posted its highest-ever standalone net profit of Rs 3,716.5 crore in the second quarter of FY24, comfortably beating analyst projections of Rs 2,921 crore. The company’s net profit jumped by a robust 80.3% compared to the same period last year when it was Rs 2,061.5 crore.

. This came on the back of increased non-operating income, easing commodity prices, improved net sales and cost-cutting, the company said in an exchange filing.

. The auto major’s total revenue in Q2FY24 grew 24.1% to Rs 37,905.7 crore from Rs 30,543.3 in the same period last year. A total of 552,055 vehicles were sold in the quarter, out of which 482,731 vehicles were sold domestically and 69,324 cars were exported. Sales during the same period last year totalled 517,395 units, of which 454,200 were in domestic markets and 63,195 were in export markets.

. Incidentally, the company also recorded its highest-ever half-yearly sales volume, net sales and net profit in the first half of FY24 (H1FY24). The company made a net profit of Rs 6,201.6 crore in H1FY24 as against Rs 3,074.3 crore. The company sold 1,050,085 units in total during the period, marking a 6.6% increase over the six months. A total of 132,542 units were exported, while 917,543 units were sold domestically.

. The company said it has attained leadership in the Indian sports utility vehicle (SUV) market with a market share of 23.3% on the back of its robust product lineup. Utility vehicle sales - which includes SUVs and the seven-seater 'Ertiga'- comprised a whopping 32% of quarterly volumes, up from 16% a year earlier, sending revenue up 25% to Rs 35,535.1 crore.

. The pain point is that the market for the entry-level (sub-Rs 6-lakh) car segment has shown no growth. Addressing the media after the earnings, chairman RC Bhargava said that for the long-term health of the Indian car market, the revival of small-market car demand is important. He sees the demand picking up again in the next 2-3 years. “If the small car market doesn't revive, long-term sustained growth of even 6-7% in the market won't be possible," he observed.

. “Structurally MSIL has successfully transitioned from primarily being in the small cars space to becoming a leader in the SUV segment as well and we see this trend continuing," said Himanshu Singh, research analyst with stock broking firm Prabhudas Lilladher Pvt Ltd.

. “We are still in a position to manufacture entry-level cars- we can ramp up the production, but for that customer demand has to come back,” Bhargava said.

. Exports also saw a 9.7% YoY jump to 69,324 units in the second quarter. During the last quarter, MSIL expanded its export portfolio by shipping the Jimny to Latin America, the Middle East and Africa, maintaining its pole position as India’s largest passenger vehicle (PV) exporter.

. Interestingly, the automaker's demand from rural areas continues to be in a reasonably good shape growing at over 11%, beating the urban market (less than 10%), Bhargava informed.

. He added that the company would grow its volume by 10% by the end of FY24 (with about 18 lakh unit sales in the domestic market), nearly twice as much as its competitors in the passenger vehicles market.

. The company is looking to breach the production milestone of 2 million units in total sales (including domestic, exports and sales to other OEMs) in FY24, after crossing the 1 million mark in H1.

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Maruti Suzuki Q2 profits soar 80.3% YoY to Rs 3,716.5 crore

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