Maruti Suzuki Q4 Earnings Dipped: Should You Remain Invested?

The automobile major Maruti Suzuki today announced its quarterly results that surprised everyone. Though it failed to level upto the expectations due to increase in the metal costs and the emergence of e-vehicles concept, but it is believed that this actively traded stock will continue to be a strong competitor to its contemporaries.  Let’s have a look at its report card:-

Profit After Tax

Maruti Suzuki posted 10 percent rise in profit at Rs 1,882.10 crore for the March, way below the estimate of Rs 2,087 crore. The company registered a net profit of Rs 1,710.50 crore.

Total Income

The total income of Maruti Suzuki revved upto 2 percent to Rs 21,760.60 crore during the quarter as against Rs 21,200.30 crore in the last year. For the December quarter the company reported total income of Rs 19,528 crore.

Sales

The company reported sales of 461,773 vehicles during January- March quarter, growth by 11.4% over the same, sales in the domestic market increased to 11.6% and exports stood at 34,691 units.

Dividend

Seeing the rise in the profitability the board recommended the dividend of Rs 80 per share with a face value of Rs 5. The dividend for the year 2016-17 was Rs 75 with a face value of Rs 5 per share.

Operating profit

The operating improved by 24.4% to Rs 2,312 crore from y-o-y earlier, but partially it was declined due to adverse commodity prices and increased promotional expenses.

Effect on the share price

The shares of Maruti Suzuki dipped to 2.5% to Rs 8,721 and falling by 5% in the intraday market after the automaker reported earnings.

From a volume perspective the market may seem duopolistic; however, if we were to evaluate on the basis of value, 4-5 OEMs would come into play –  said Rajeev Singh, Partner Deloitte India

Maruti Suzuki Share Price Outlook

Recently, the country’s largest car maker Maruti Suzuki India Limited was conferred with a title of leader in the utility vehicles. Riding on the success of its diversified models like Vitara Brezza, Ertiga, and S-Cross, the company did a distinctive job. Apart from that, Maruti Suzuki also gathered pace in light commercial vehicle segment with its Super Carry Mini truck. The excellent product response helped the company to achieve higher volumes of sales.

The company grabbed the lion’s share in the compact car segment too with successful launches like Dzire, Baleno, Swift, etc. In the recent auto exhibition the company displayed a unique concept of e-survivor that will be launched in the year 2020 under the electric vehicle category. Maruti Suzuki is also currently working on the next generation hybrid technology to give competitor run for the money.

Conclusion

India’s oldest car maker Maruti Suzuki has definitely listened to ebb and flow of the market demands and continues to do so.  Investing in this stock would definitely help you fetch good returns.