Maruti Suzuki shares fall as much as 4% after Q3 earnings1 min read . Updated: 29 Jan 2016, 05:41 PM IST
Intraday, the Maruti stock touched a low of Rs3,927.20 per share, before closing 0.10% higher at Rs4,097.45
Mumbai: Shares of Maruti Suzuki India Ltd on Friday fell as much as 4% after the company reported lower-than-estimated earnings as the cost of promoting new models eroded gains from an increase in vehicle sales.
The stock touched a low of ₹ 3,927.20 per share. Since 15 January till date, it has fallen 8.1% and in the year-to-date, it has dropped 13%.
The car maker’s net profit rose to ₹ 1,019.3 crore in the quarter ended 31 December from ₹ 802 crore a year earlier. A Bloomberg poll of 29 analysts had estimated Maruti’s net profit at ₹ 1,330 crore. Net sales in the December quarter grew 20.4% to ₹ 14,767.7 crore.
Maruti Suzuki executives said margins were affected because of a spate of launches that resulted in an increase in marketing spending. Advertising costs went up by ₹ 70 crore last quarter, which saw the launch of premium hatchback Baleno and WagonR AGS, and a facelifted edition of the Ertiga, among others, Mint reported.
Brokerage firm Emkay Share and Stock Brokers Ltd has retained its buy rating on the stock and kept its target price at ₹ 4,900 a share. Antique Stock Broking firm also kept a buy rating on the stock with a target price of ₹ 4,951 a share.
Shares of Maruti Suzuki India closed 0.10% higher at ₹ 4,097.45. The BSE Auto index gained 1.91% to 17,046.03 points, while India’s benchmark Sensex rose 1.64% to 24,870.69 points.