Skoda India profit after tax plunges 66% in FY18

New Delhi | Published: January 17, 2019 4:14:50 AM

Skoda Auto India, the local arm of the Czech carmaker, has reported a 66.21% decline in its profit after tax to Rs 22.18 crore during the financial year ending March 2018, hit by higher expenses and lower financial support from the parent entity.

skoda, skoda auto india, automobile sector, automobile industryTotal income from operations in FY18 remained flat at Rs 4,485.68 crore against Rs 4,488.03 crore in FY17.

By Pritish Raj

Skoda Auto India, the local arm of the Czech carmaker, has reported a 66.21% decline in its profit after tax to Rs 22.18 crore during the financial year ending March 2018, hit by higher expenses and lower financial support from the parent entity.

The company’s profit after tax during FY17 stood at Rs 65.65 crore, as per filings sourced from the corporate affairs ministry.

Total income from operations in FY18 remained flat at Rs 4,485.68 crore against Rs 4,488.03 crore in FY17.

Although gross margin during the fiscal increased due to the favourable impact of exchange rate and relatively better domestic sales, the company said the same was offset by increase in financial cost, impairment loss and other expenses.

“Lower financial support received from Skoda Auto as compared to previous financial year resulted into worsening of profit of the company,” Skoda Auto India said.

Even though the domestic demand for the company’s products improved during the fiscal compared to the year-ago period, it did not reflect in the balance sheet.

Domestic sales during FY18 increased 26.80% y-o-y and production rose by 14.78% y-o-y, albeit on a low base.

In FY18, when the size of the Indian passenger vehicles market was nearly 33 lakh units, Skoda Auto India could only sell 17,387 units. While domestic sales in FY16 increased by just 2.43% y-o-y, the same declined by 10.83% in FY17, according to data from Society of Indian Automobile Manufacturers.

Email sent to the company for this story did not elicit a response. Experts believe that Skoda’s ultimate parent Volkswagen’s India 2.0 project, under which the two brands seek a combined market share of 5%, will bore some fruits in the next few years.

The project will be led by Skoda where the sub-compact MQB AO platform will roll out competitively-priced products for the market from both the Volkswagen and Skoda stable. These are being specially developed for the needs of customers in India.

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