Maruti Suzuki records profit of Rs 1,556 crore for Q1 FY18, up 4.7%

Country’s leading automaker, Maruti Suzuki India, today announced its results of Q1 of FY2018. The company has reported positive overall growth, with net revenue of Rs 17,132 crore, up 14.7 percent from the numbers of Q1 of last fiscal, which stood at Rs 14,927 crore, as per BSE data. 

Net profit for the quarter soared to Rs 1,556 crore (+4.7 percent), as compared to Rs 1,486 crore of Q1 of FY2017.

While sales for the April to June period of FY2018 have been on a rise, with cumulative 368,431 units (+14.3 percent) getting sold (Q1 FY2017: 322,340), the month of June brought in a sharp Month-on-Month dip of 28.39 percent (May 2017: 130,248), owing to the eager market anticipation ahead of the roll-out of GST in July. 

However, on a YoY basis, June 2017 was still better, albeit marginally by 1.2 percent, clocking 93,263 units over the 93,151 units sold in June 2016.  The Q1 FY2018 net profit however, has been below expectations, owing to the one-off impact of compensating its dealers for the excise duty loss incurred on their inventories in place, billed before July 1. 

The otherwise soaring profits can be attributed to the high demand for UVs in the country, which have led to such offerings from the company, including the pack of Vitara Brezza, S-Cross, Ertiga and the Gypsy, bringing in 13,879 units in June 2017 (June 2016: 9,708 / +43 percent), 22,608 units in May 2017 (May 2016: 13,596 / 66.3 percent) and 20,638 units in April 2017 (April 2016: 16,044 / 28.6 percent).

Indian market’s penchant for SUVs has led the Brezza, launched in March 2016, inch the 1,50,000 sales mark, by already clocking 145, 524 units till end-June 2017. With average sales in H1 of CY2017 hovering at 10,059 units and with GST only helping the cause with marginally reduced pricing, the July numbers are set to acknowledge the milestone. 

On the other hand, its premium hatchback offering, the Baleno, being sold through a relatively nascent Nexa retail channel, surpassed the 2,00,000 milestone in June 2017. Right from its launch in November 2015 through to June 2017, this premium Maruti has been in the Top 10 at least 16 times, with best-ever sales achieved in April 2017 – 17,530 units.

According to the company, “While higher non-operating income and cost reduction efforts contributed to its increase in profits, costs were seen impacted by higher commodity prices, and sales promotion & marketing expenses.”