Maruti Q2 net profit grows 3.4% to Rs 2,484 crore

Suzuki and Toyota are in talks for electric mobility and MSI would continue to access technology from its parent.

India's largest carmaker Maruti Suzuki India on Friday posted just over 3 per cent rise in its net profit at Rs 2,484.3 crore for the second quarter to September, hit by lower non-operating income.

The company had reported a net profit of Rs 2,401.5 crore for the same period of the previous fiscal.

Net sales, however, rose 21.8 per cent to Rs 21,438.1 crore for the quarter under review as against Rs 20,048.6 crore a year ago, Maruti Suzuki India (MSI) said in a statement.

"The main reason for 3.4 per cent growth in net profit was decline in amount of non-operating income during the quarter," MSI chairman R C Bhargava told reporters in New Delhi.

The company had a one-time gain of such income in the same period of the previous fiscal, he added.

"Tax was also on the higher side this fiscal (as compared to the same period of the last fiscal)," Bhargava said.

Moreover, there was some impact of commodities and advertisement expenses, along with increase in effective tax rates.

During July-September, the company sold a total of 492,118 vehicles, including 34,717 in overseas markets, a growth of 17.6 per cent over the same quarter a year ago.

"Models like Baleno, Vitara Brezza and Dzire continue to be on high demand," he said.

On sales outlook for the current fiscal, Bhargava held that the company is maintaining a double-digit forecast.

"However, do not expect it to be 19-20 per cent, but it is going to be in double digits for sure," he asserted.

MSI, which has around 50 per cent market share in the domestic passenger vehicle segment, reported sales growth of over 17 per cent in the first half of 2017-18. It sold a total of 886,689 units during April-September, a growth of 15.6 per cent.

Net profit for the period stood at Rs 4,040.7 crore, up 3.8 per cent from the same period of the previous fiscal.

In the domestic market, the company sold 825,832 units while it shipped 60,857 units to overseas markets during the period.

Asked about the company's plans on electric vehicles, Bhargava replied that electric mobility is all set to make a mark in India.

"We will make electric cars. We cannot give a timeline right now, but electric mobility is set to come to India. We intend to be leaders in the electric segment as well," he said.

He also said its parent Suzuki and Toyota are in talks for electric mobility and MSI would continue to access technology from its parent.

On hybrids, he said MSI would continue to invest in the technology as it sees them as the bridge when transition takes place from normal combustion engine vehicles to fully electric in future.

"We will continue to invest in hybrid technology. The government has set a target of electric mobility by 2030. It can take later than that and in that period, there would be conventional, hybrid and electric cars on roads. So, we need to work on all the three," Bhargava said.

He also said the auto industry would continue to engage with the government to provide support to eco-friendly technologies, including hybrids, during the transition.

MSI's stock on Friday ended at Rs 8,114.80, up 0.47 per cent, on the BSE.