Maruti Suzuki's Q2 profits jump 60 percent on strong domestic demand

Maruti Suzuki continued its good show as demand for its cars, especially those launched recently remained strong and company’s efforts to rationalise costs began to deliver results.

For the second quarter of 2016-17, India’s largest car maker registered a 60 percent jump in its profits to Rs 2398 crore from Rs 1486 crore in the corresponding period of the previous year. Revenues during this period topped Rs 20,297 crore (Rs 16,972 crore). The company sold 4.18 lakh vehicles in the second quarter which was 18 percent higher than what it sold in the second quarter of last fiscal. Domestic sales grew by 18.5 percent to 3.83 lakh units. Its recently launched cars Baleno and Brezza have waiting period that are as much as 30 weeks. In September it sold 1.37 lakh units, its highest ever monthly sales ever.

Margins improved at operating level on account of better capacity utilization and benefits of cost rationalization. Operating profit margin rose to 11.86 percent (9.29 percent). Net profit margin also rose to 11.81 percent (8.76 percent) on the back of other income that jumped by Rs 329 crore. Adverse foreign exchange movement prevented the company from taking full advantage of this extraneous income.

The stock rose by Rs 15.90 to touch Rs 5885 per share as the markets closed today.