Maruti Suzuki Q2 Results: Profit Plunges 17.5%, Marginal Rise In Revenue

Maruti Suzuki India Ltd. has reported a tepid quarterly performance as India’s largest carmaker realigns production to match muted demand in the world’s third largest automotive market.

The standalone net profit of the Swift maker fell 17.4% year-on-year to Rs 3,069 crore in the three months ending Sept. 30, on the back of revenue that grew 0.4% to Rs 37,203 crore, according to an exchange filing on Tuesday. Analysts polled by Bloomberg had estimated the top line at Rs 37,229 crore and the bottom line at Rs 3,710 crore.

• Net profit down 17.4% at Rs 3,069 crore (Estimate: Rs 3,710 crore).

• Revenue up 0.4% at Rs 37,203 crore (Estimate: Rs 37,229 crore).

• Ebitda down 7.7% at Rs 4,417 crore (Estimate: Rs 4,712 crore).

• Ebitda margin down 100 basis points at 11.9% (Estimate: 12.70%).

One basis point is one-hundredth of a percentage point.

The decline in profit was attributed to a "significantly higher" tax outgo of Rs 1,015 crore, as against Rs 67 crore a year ago.

That's because the Union Budget 2024 removed indexation benefit on long-term capital gains on debt mutual funds purchased before April 1, 2023. The deferred tax liability, as a result, stood at Rs 837.6 crore.

"The actual payment of tax would be made at the time of redemption of this asset class," Maruti Suzuki said in the exchange filing. "The cash outflow towards tax could be different at the time of redemption, depending on the actual gain and prevailing tax regulations."

That, however, doesn't explain the tepid revenue growth.

In the quarter ended Sept. 30, Maruti Suzuki's domestic sales fell 3.9% year-on-year to 5,41,550 vehicles. Exports, however, rose 12.1% year-on-year to 77,716 vehicles.