Maruti Suzuki India on Thursday posted a net profit of Rs 1019.3 crore, up 27.1% year-on-year, for the three months to December, missing expectations, pegged by Bloomberg poll of analysts at Rs 1,333 crore.
While revenues during the period rose to Rs 15,081 crore, a growth of 19.9 % y-o-y, expenses rose by 18.3% driven by a jump in employee benefit costs of 34.53%. Gross margins during the quarter contracted by 165 basis points to 31.5% which led to ebitda margins coming in at 14.4%, lower than estimated.
Net realisations were higher by 3.8% year-on-year at Rs 4.03 lakh. Speaking to analysts after the announcement, Maruti Suzuki India, CFO, Ajay Seth said volumes were driven by the festive period sales and new launches. the company hopes to sell 1.5—1.6 million cars in FY17, the management said.
The management observed they would need to continue with discounts to attract customers. The average discount on the average selling price of cars saw an increase in Q3FY16 to Rs 21,997 compared to Rs 19,579 in Q2FY16.
MSIL’s unit sales during the quarter, including exports, stood at 3,74,182 units, a growth of 15.5%. Maruti launched the premium hatchback Baleno and has been able to sell around 28,000 units till December.
Tax expenses for the company in the quarter saw a jump of 67%% from Rs 262 crore in the October-December quarter in 2014-15 to Rs 436 crore in the period this year. For the first nine months of the fiscal year, the company posted a net profit of Rs 3,437.8 crore, up 41.6% from the same period last year, while net sales of the company rose 17.2% to Rs 41,420.9.
The Maruti Suzuki scrip closed at 0.37% lower at Rs 4,093.55 on Thursday on BSE, ahead of the results announcement.