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Setback for Maruti Suzuki; Car major hit by this massive bad news
Maruti registered a net profit of Rs 1,489.3 crore in Q3FY19, which was down by a huge 17.21% from Rs 1,799 crore in the corresponding period of previous year.
The largest passenger vehicle maker Maruti Suzuki has suffered a massive blow. The iconic carmaker has announced a disappointing December 2018 (Q3FY19) quarter. Maruti registered a net profit of Rs 1,489.3 crore in Q3FY19, which was down by a huge 17.21% from Rs 1,799 crore in the corresponding period of previous year. On the other hand, Q3FY19 PAT saw an even bigger drop of 33.52% as against Rs 2,240.4 crore in preceding quarter.
Meantime, Maruti Suzuki revenue from operations was at Rs 19,668.3 crore in Q3FY19, witnessing a sequential rise of 1.99% from Rs 19.283.2 crore in Q3FY18 but was down by 12.33% compared to Rs 22,433.2 crore in Q2FY19.
Total sales stood at 189,264 vehicles which was also weak in Q3FY19, as it plummeted by 12.18% from 215,519 unit sold in Q2FY19. On yearly basis, the Q3FY19 sales were muted, as Maruti posted a sales record of 189,400 unit in Q3FY18.
In its financial audit report, Maruti stated that, the results of this quarter have to be viewed in the context of particularly weak market conditions. While SIAM had forecast a passenger vehicle domestic market growth of 8~10% for the year, Industry could grow by 4.4% in the first 3 quarters of the year and declined in the third quarter by 0.8%. Maruti grew by 7.2% in the first three quarters and by 0.4% in the third quarter in unit wholesales.
Additionally, Maruti helped dealers retail about 90,000 vehicles in excess of wholesale to keep dealer inventories lean as the festive season sales growth was below expectation.
Not only domestic sales, even export growth was tepid for Maruti. Passenger vehicle exports from India also declined by 8.5% owing to weakness in global markets, protection in some markets and devaluation of most currencies with respect to the US Dollar.
➡️मुनाफा ₹1,790 करोड़ से घटकर ₹1,490 करोड़
➡️आय ₹19,283 करोड़ से बढ़कर ₹19,668 करोड़
➡️EBITDA ₹3,038 करोड़ से घटकर ₹1,931 करोड़
➡️मार्जिन 15.8% से घटकर 9.8% रहा। pic.twitter.com/DTRfPVegEP
— Zee Business (@ZeeBusiness) January 25, 2019
Maruti explained that, the quarter was also marked by a combination of several adverse factors coming together which impacted profitability:
- Adverse Commodity prices
- Adverse Foreign Exchange rates
- Higher Marketing & Sales expenditure
- Higher costs in resources and capacities which were earlier planned to enable a higher estimated growth
Some impacts were partially offset by the Maruti’s regular efforts in cost-reduction, VA-VE exercises, suggestions from employees and supplier partners.
For nine month period of FY19, Maruti sold a total of 428,643 vehicles during the quarter, a decline of 0.6% over the same period the previous year.The Company registered Net Sales of Rs. 189,264 million, lower by 0.1 % and Net Profit of Rs. 14,893 million lower by 17.2 % over the same period previous year.
On BSE, Maruti's stock price was trading at Rs 6498.55 per piece down by Rs 538.85 or 7.66% at around 1515 hours.
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