Maruti Suzuki reported a 65.35% plunge in net profits at Rs 475.3 crores during the July to September quarter compared to Rs. 1371.6 crores last year. However, the company’s net profit increased marginally from Rs 440 crores when compared to the April to June quarter in 2021.
Maruti’s EBITDA came at Rs. 855 crores, down over 56% suggesting that the lockdown and semiconductor chip shortage gloom over the automobile industry is far from over.
However, Maruti’s net sales rose by 9% to Rs 19,297 crores against Rs 17,689 crore. Total revenue from operations stood at Rs 20,538 crores against Rs 18,744 crores, rising by 9% in comparison to last year in the same quarter.
Maruti Suzuki in its filing attributed the abysmal margin and profit figures to an acute shortage of chips/semiconductors and unprecedented rise in commodity prices like steel, aluminium (and other important metals related to the auto industry).
Read more on Groww: Maruti Suzuki & Chip Shortage
The automobile giant sold a total of 3,79,541 units during the quarter under review. Sales in the domestic market were recorded at 3,20,144 units. However, export sales were recorded higher than any quarter ever at 59,408 units.
The scrip remained largely flat on the Dalal street, fluctuating between 0.5 to 0.9% gains after the company posted its second quarter results.
The automobile sector has been having it rough and the New Delhi headquartered Suzuki is no different. It has remained under intense pressure from the rising prices of steel, aluminum, etc besides the pandemic shock. It has been trying its level best to absorb the cost that has led to increased input cost and profit hitting. The company remains unsure of how long it can continue to do so.
Majority of the car makers have been forced to take production cuts as not only is there an acute shortage of chips and semiconductors, but increased demand for consumer electronics that employ these very chips.
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Research Analyst: Bavadharini KS