Maruti Suzuki Q2 net profit flat on year, rises sequentially1 min read . Updated: 29 Oct 2020, 02:26 PM IST
- Investors are optimistic that Maruti will benefit from a shift in demand towards small cars due to faster recovery in demand in rural areas and increasing preference for personal mobility
NEW DELHI: Maruti Suzuki India Ltd, the country's largest car maker, on Thursday reported a 0.95% year-on-year increase in its September quarter net profit to ₹1,371.6 crore.
On a sequential basis, however, the New Delhi-based company has managed to engineer a sharp turnaround in its fortunes from the June quarter when it had reported a loss of ₹249.9 crore - its first ever in two decades - due to the havoc wreaked by the pandemic and ensuing lockdowns.
Net sales during the quarter rose 9.7% year-on-year to ₹17,689.3 crore on the back of of 16.2% jump in its vehicle sales to 3,93,130 units. Vehicle Sales stood at 36,775 units in the June quarter.
"This performance in this financial year has been affected by the unforeseen Covid-19 pandemic. In the first quarter, the performance of the company was significantly affected due to Covid-19 related disruptions and lockdowns. In the second one, the performance improved on the back of some demand recovery and gradual improvement in supply conditions," the company said in a statement.
Automobile manufacturers across the country had to suspend operations beginning 22 March following government directives amid the covid-19 pandemic.
The growth in earnings comes on a very low base of last year when the company's vehicle sales had declined by 17%. The maker of Alto and Swift hatchbacks had a rough FY20 as consumer demand took a hit because of the economic slowdown and Ian ncrease in prices due to change in emission and safety norms.
Investors are optimistic that Maruti will benefit from a shift in demand towards small cars due to faster recovery in demand in rural areas and increasing preference for personal mobility, and that the company is better positioned to tackle the current downturn compared to most of its peers because of its cash reserve of ₹35,000 crore.