Maruti Suzuki India, the country's largest passenger carmaker, on Thursday said net profit for the quarter ended June increased 4.4% year-on-year to 15.56 billion rupees ($242.7 million), as factors like a one-time compensation paid to dealers during the switch to a new nationwide sales tax weighed on earnings. 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. Profit Before Tax in the quarter stood at Rs 22,987 million, reflecting a growth of 12.3% over same period previous year.
Net sales rose 16.7 percent to Rs204.60bn and the company sold a total of 394,571 vehicles during the quarter, driven by an increase in demand for its Baleno hatchback and Vitara Brezza utility vehicle.
The company during April-June, sold a total of 3,94,571 vehicles, including 26,140 in overseas markets.
"Growth in volumes, favorable product mix, higher non-operating income and cost-reduction efforts contributed to [an] increase in profits".
The statement further read that that during the quarter, compensation for dealers due to the tax loss incurred on vehicle stock at the time of switchover to GST added to the losses.
Operating profit increased 5.3 percent to Rs 2,331.2 crore but margin contracted by 150 basis points to 13.6 percent due to higher commodity prices and sales promotion & marketing expenses. Operating profit growth was estimated at 13 percent and margin contraction of 100 basis points, according to a CNBC-TV18 poll. "The demand is expected to be strong going ahead..."