The country's largest carmaker Maruti Suzuki India has posted an impressive 47.5% year-on-year increase in standalone net profit for the third quarter of the current fiscal at Rs 1744.5 Cr. The total income for the same quarter stood at Rs 19,173.1 Cr, which is up 13.06% year-on-year (but down 5.5% quarter-on-quarter). The big jump in profits an earnings is especially significant for two reasons - the quarter includes most of the impact seen on auto sales that came from Prime Minister Modi's demonetisation move, and Maruti invested in the launch of a new product that arrived just as Q4 has begun. The Ignis hatchback launched by Maruti earlier this month has seen the company engage in a big marketing buildup, and also preparation for its manufacturing ahead of the launch to build up an inventory for the model. In a statement to the stock markets, the company has said, "Increase in share of the Company's higher segment models, lower sales promotion and marketing expense, cost reduction efforts and higher non-operating income contributed to increase in profits." This growth has come largely off the back of the Baleno, Vitara Brezza and Ciaz; even as models like the Alto, Swift and Wagon R have lost some steam.
In fact Maruti Suzuki has also said that the numbers would have been even stronger, had it not been for a partial offset by the increase in commodity prices and adverse foreign exchange movement during the quarter in question. The quarter-on-quarter comparison also shows that net profit is down 27% over Q2'17 when Maruti had posted a net profit of Rs 2398 Cr. The festival period saw Maruti Suzuki achieve large volumes in October 2016, which led to a total unit sales figure of 387, 251 cars sold in Q3'17 (up 3.5% over Q3'16). Exports accounted for 30,748 units in Q3'17 and exports so far this fiscal have almost hit one lakh units at 92,291 cars exported in April-December 2016. Net profit for the 9 month period is up a staggering 44.8% at Rs 5628.7 Cr.
After the Ignis, Maruti Suzuki is expected to launch another new model - the Baleno RS - in the current fiscal. It will also have the opening of the Gujarat manufacturing facility in Q4'17. The next fiscal looks promising as Maruti expects well as exports to go up. The next generation of the Swift and Swift Dzire - both extremely large volume and significant models - in the new year.
