Maruti Suzuki, India`s top-selling car maker, posted a quarterly profit that missed estimates even though sales grew steadily, as a rise in commodity prices and the impact of a new nationwide sales tax ate into earnings.
The company, majority-owned by Japan`s Suzuki Motor Corp, announced on Thursday a profit of 15.56 billion rupees ($242.66 million) for the first quarter ended June 30, up 4.4 percent from the year-ago quarter.
That was below the 17.01 billion rupees average estimate of analysts, according to Thomson Reuters data. (http://bit.ly/2eQcEmf)
Maruti, which provides the bulk of Suzuki Motor`s revenues, sold a total of 394,571 vehicles during the quarter, up 13.2 percent from the year-ago period. Total income jumped 17 percent to 204.60 billion rupees.
Maruti dominates the small car market in India and has been expanding its net by launching more premium vehicles to compete better with newer and planned entrants such as Kia Motors and SAIC Motor Corp. Higher sales of premium models such as the Brezza SUV and Baleno hatchback helped its bottomline in the March quarter.
In the latest quarter, the company absorbed a one-time cost paid to dealers to compensate for the tax loss incurred on vehicles in stock during the transition to the Goods and Services Tax, which India introduced on July 1. The amount was not disclosed with the quarterly results.
Maruti also said its profit was hit by higher commodity prices and costs from sales promotion and marketing.
The automaker also incurred a deferred tax expense of 1.85 billion rupees, more than four times the amount it spent last year.
Shares of Maruti were largely flat after the results. Maruti is valued by the market at more than $35 billion, compared to Suzuki Motor`s market capitalisation of about $21 billion. The Japanese company owns 56.2 percent of Maruti.
($1 = 64.1225 Indian rupees)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)