Table of Content
Maruti Suzuki India Limited Q2 Results Highlights
- Maruti Suzuki India, the largest passenger car manufacturer in India, posted a standalone net profit of ₹3,716.5 crore for the quarter ending September 2023.
- The company’s net profit surged by a remarkable 80.28% compared to ₹2,061.5 crore in the same quarter of the previous year.
- The surge in net profit was attributed to increased non-operating income, lower commodity prices, improved net sales, and cost-cutting initiatives, as per the company’s exchange filing.
- In Q2FY24, Maruti Suzuki’s standalone revenue increased by 23.8% to ₹37,062.1 crore from ₹29,930.8 crore, YoY.
- The company reported sales of 552,055 vehicles in the quarter, with 482,731 vehicles sold domestically and 69,324 cars exported. In the same period last year, total sales were 517,395 units, with 454,200 in the domestic market and 63,195 in export markets.
- The operational performance of the company improved significantly, with Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) rising by 72.8% to ₹4,784 crore from ₹2,768 crore, and the EBITDA margin expanding by 360 basis points (bps) to 12.9% from 9.3%, YoY.
Additional Read: Q2 Results Dashboard
Business Highlights for Q2 FY2023-24:
- Financial/Overall
- Highest ever quarterly sales volume: 550,000+ units
- Highest ever quarterly net sales and profit
- Domestic Market
- Passenger vehicle wholesales up by ~8% (industry growth ~5%)
- Leadership in SUV segment with a 23.3% market share
- Highest ever quarterly sales of CNG vehicles: ~118,000+ units
- Exports
- Exported Jimny-5 Door to Latin America, Middle East, and Africa
- Largest exporter of Passenger Vehicles from India, with ~69,000 units exported
Highlights of Maruti Suzuki India Q2 FY’24 and Q2 FY’23
*All figures except sales volume are in INR million
| Q2 FY’24 | Q2 FY’23 | |
| Sales Volume | 552,055 | 517,395 |
| Net Sales | 355,351 | 285,435 |
| Op. EBIT | 39,901 | 20,435 |
| PBT | 47,986 | 26,463 |
| PAT | 37,165 | 40,615 |
Q2 FY’24 Financial Analysis
In the financial analysis of Q2 FY’24 compared to Q2 FY’23, several key factors have influenced the margin movement. These factors can be categorised into both positive and negative aspects.
On the positive side, several factors have contributed to the improved margin in Q2 FY’24. Firstly, there has been an increase in realisation, which means that the company is earning more per unit of its product or service. This is a promising sign for profitability. Additionally, there has been a softening of commodity prices, which reduces the cost of inputs for the company, further supporting margin improvement. Cost reduction efforts have also played a vital role in boosting profitability.
Another positive factor is the relatively better sales volume in Q2 FY’24, which has led to improved capacity utilisation. When a company utilises its production capacity more efficiently, it can spread fixed costs over a larger number of units, improving profitability. Moreover, there is higher non-operating income, which could be attributed to investments or other income sources outside the core operations of the business.
However, it’s crucial to acknowledge the negative factors that have impacted the margin movement. In Q2 FY’24, there have been higher sales promotion expenses, which indicates increased spending on marketing and promotional activities. This can squeeze margins if not accompanied by a proportional increase in revenue. Another negative factor is the higher depreciation expenses, which could be due to the depreciation of assets, impacting the company’s overall profitability.
In summary, the financial analysis of Q2 FY’24 vs. Q2 FY’23 reveals a mixed picture with both positive and negative factors influencing the margin movement. Improved realisation, softening commodity prices, cost reduction efforts, higher sales volume, and non-operating income have contributed positively, while higher sales promotion and depreciation expenses have posed challenges to the margin performance. This comprehensive assessment provides valuable insights into the company’s financial health during this period.
Also Read: Maruti Suzuki India Share Price
Financial Analysis of Q2 FY’24 vs. Q1 FY’24
Key Reasons for Margin Movement:
Positive Factors:
1. Relatively Better Sales Volume Leading to Improved Capacity Utilisation: Increased sales volume in Q2 compared to Q1 resulted in better utilisation of production capacity, contributing positively to margins.
2. Softening of Commodity Prices: The reduction in commodity prices during Q2 helped lower the cost of raw materials, positively impacting profit margins.
3. Cost Reduction Efforts: Implemented cost reduction initiatives in Q2, which resulted in decreased operating expenses, contributing to improved margins.
4. Favourable Foreign Exchange Variation: Benefitted from a favourable foreign exchange rate, which positively affected revenue and profit margins, especially if the company exports its products.
Negative Factors:
1. Higher Sales Promotion Expenses: Incurred higher expenses on sales promotions in Q2, which negatively impacted profitability as these costs can eat into margins.
2. Lower Non-Operating Income: Experienced a reduction in non-operating income during Q2, which could be due to decreased interest income, investments, or other sources of non-operating revenue, affecting overall margins negatively.
Overall, Q2 FY’24 showed margin improvements due to increased sales volume, cost-saving efforts, and favourable external factors like lower commodity prices and favourable foreign exchange rates. However, higher sales promotion expenses and reduced non-operating income had a negative impact on margins during this period.
About Maruti Suzuki India Limited
Maruti Suzuki India Limited (MSIL), a subsidiary of Japan’s Suzuki Motor Corporation, is India’s largest passenger car manufacturer, known for revolutionising the country’s automotive industry. MSIL primarily focuses on manufacturing and selling passenger vehicles in India, offering a diverse portfolio of 16 car models with over 150 variants, ranging from small entry-level cars like Alto to the luxurious sedan Ciaz. Besides manufacturing, the company is involved in pre-owned car sales, fleet management, and car financing. MSIL operates manufacturing facilities in Gurgaon and Manesar, Haryana, and has a cutting-edge R&D centre in Rohtak.
Originally named Maruti Udyog Limited, the company was founded in February 1981 as a joint venture between the Indian government and Suzuki Motor Corporation, with Suzuki now owning a 56.2% equity stake. MSIL’s shares are publicly traded on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Source :
https://www.marutisuzuki.com/corporate/investors/details-of-the-business\
https://www.bseindia.com/xml-data/corpfiling/AttachLive/381628ec-6f81-4bb9-a800-fa59cb7f5fbd.pdf
