Maruti Q2 net profit up 3.4% at Rs2,484 cr

Country's largest carmaker Maruti Suzuki India has reported a net profit of Rs2,484.3 crore for fiscal second quarter ended 30 September 2017, a 3.4 per cent year-on-year increase from a net profit of Rs2,401.5 crore for the comparable quarter of the previous fiscal.

The company said profit would have been higher but for lower non-operating income.

Net sales for the quarter rose 21.8 per cent to Rs21,438.1 crore against Rs20,048.6 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 here.

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.

Maruti said higher commodity prices and an increase in advertisement expenses also impacted profits during the quarter.

During July-September, the company sold a total of 4,92,118 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.

Bhargava said the company is maintaining a double-digit sales growth forecast for the current fiscal, adding, ''However, do not expect it to be 19-20 per cent, but it is going to be in double digits for sure."

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 8,86,689 units during April-September, a growth of 15.6 per cent.

Net profit for the six-month period stood at Rs4,040.7 crore, up 3.8 per cent from the same period of the previous fiscal. In the domestic market, the company sold 8,25,832 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 of the three," Bhargava said.